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What do high-net-worth individuals need to know about authorised push payment fraud?

Posted on 14 December 2022

Fraud is on the increase. We’ve all been sent the fake links - from Royal Mail, delivery couriers or track-and-trace. These links may be the precursor to a particular form of fraud called authorized push payment ("APP") fraud.

In the first quarter of 2022 there were nearly 100,000 reported cases of APP fraud in the UK - totalling a loss of nearly £250 million (although it is expected that the real figure is likely to be higher). 96% of those victims in the first quarter of 2022 were individuals, with £209 million being lost by individuals rather than corporates.

What is APP Fraud?

APP fraud involves tricking the victim into making a payment of money, thinking it’s going somewhere entirely legitimate. The monies are then transferred out to multiple accounts - often abroad, specifically to jurisdictions where recovery can be prohibitively expensive and time consuming.

The key element is the use of deception, impersonation and social engineering tactics to convince an unwitting individual into making a transfer.

Common examples include:

  • Investment scams – where the individual transfers monies to a fictitious investment, which is in fact merely an account controlled by the fraudster(s). This scam is often communicated via social media or email and can purport to be from a well-known bank or investment firm.
  • Bank / police scam – where an individual poses as a member of bank staff or law enforcement who informs a victim that they have been the victim of a fraud. The victim is persuaded to transfer money to a "safe account" - which is in fact an account they control.
  • Romance scam – where an individual convinces the victim that they are in a relationship, often online via dating apps or social media, and once trust has been established asks them to transfer money for some urgent and important reason - for example, flight issues or health problems.

The best way to avoid APP fraud is to be alert. However, we would flag to take extra care if investing in cryptocurrencies. The majority are not regulated by the FCA, meaning they are not protected by the Financial Services Compensation Scheme ruling out one possible avenue of redress.

Risk to high-net-worth individuals

High-net-worth individuals are particularly susceptible to APP fraud. The stakes are higher so the frauds are more targeted and rather than receiving generic phishing attempts which many people are now alert to, they may be targeted by highly sophisticated approaches (sometimes via a trusted intermediary) which are considerably more difficult to spot.

Fraudsters will invest considerable time and money into a fraud, where they see a potential for a higher ROI, "investing" tens of thousands of pounds on luxury goods and charters to give the appearance of personal wealth, or in payments towards trusted intermediaries for an introduction to the victim, all with the aim of building trust and eventually extracting large sums of money.

What remedies do victims have?

If you do fall victim to APP fraud, all is not necessarily lost. There are routes of recovery available, including:

a) Claim against the bank

Victims may be able to pursue a claim against the bank with whom they hold the account which was used to make payment to the fraudster. The recent Court of Appeal decision in Fiona Lorraine Philipp v Barclays Bank UK PLC EWCA Civ 318 extended the Quincecare duty to the customers of a bank, and not just their agent. However, this decision does not in itself establish a duty, and following the guidance issued in Federal Republic of Nigeria v JP Morgan Chase Bank, N.A, [2022] EWHC 1447 (Comm), it is clear that Ms Phillip (and any other victims) will need to demonstrate their bank was or should have been on notice that the transactions were fraudulent.

Unfortunately for victims, the Courts have to date been less receptive to claims against the fraudster's bank. The decision in Customs and Excise Commissioners v Barclays Bank Plc [2006] UKHL 28 confirmed that banks do not owe a duty of care to non-customers to prevent economic loss. Secondly, the Court considered and rejected claims for both knowing receipt and unjust enrichment in Tecnimont Arabia Limited v National Westminster Bank PLC [2022] EWHC 1172 (Comm).

b) Claim against the fraudster

The primarily difficulty when pursuing claims against APP fraudsters is that upon receipt of the victim's money, the funds are often swiftly transferred into multiple accounts across a number of jurisdictions.

However, where the victim is able to act swiftly enough, injunctive relief such as worldwide freezing orders remain an extremely powerful tool. In addition, we have vast experience in successful recovery from a number of the jurisdictions commonly utilised by fraudsters which are regarded as difficult.

c) Regulatory changes

The Payment Systems Regulator (PSR) published a consultation paper on regulatory changes in November 2021. A series of changes were then announced in the Queen's May 2022 speech, which will be introduced via the Financial Services and Markets Bill (amending the Payment Services Regulations), with further information provided via the PSR's September 2022 consultation. These changes include:

  • The requirement for banks to publish data on their performance in relation to APP fraud (proposed to come into effect from 2023); and
  • The requirement for banks to reimburse customers who are victims of APP fraud within 48 hours  (proposed to come into effect from / during 2024), with "only limited exceptions" such as first party fraud or gross negligence, a de minimis threshold of no more than £100 for claims and a limitation period of 13 months.

Further proposals also include (a) improved intelligence sharing between banks; and (b) a split on liability between the victim and the fraudster's bank.


This is a rapidly developing area. Many will be watching for the outcome of the underlying high court case in Philipp v Barclays Bank, which will potentially widen the scope for claims by victims against their bank. In addition, it is clear from the regulatory changes set out above that both the Government and the PSR believe that banks should be at the forefront of the battle against fraud. Please contact us if you require any advice in relation to the latest position.


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