By 
The UK Payment Systems Regulator (PSR) has reported encouraging early results from its Authorised Push Payment (APP) fraud reimbursement policy, saying the framework is reducing fraud losses, increasing compensation for victims, and driving stronger fraud prevention efforts among payment service providers.
The assessment follows an independent review conducted by Frontier Economics, which found that mandatory reimbursement rules have contributed to a significant decline in APP fraud since their introduction.
According to the review, annual losses from in-scope APP fraud have fallen by an estimated £73 million, while the number of fraud incidents has decreased by nearly 35,000 cases each year.
The report also showed notable improvements in customer reimbursement. Overall reimbursement rates increased from 54 per cent to 65 per cent, while payment service providers now reimburse approximately 97 per cent of claims covered under the mandatory policy.
Frontier Economics noted that the most significant improvements were recorded among firms that previously experienced the highest levels of APP fraud, suggesting that the reimbursement framework has strengthened incentives for institutions to invest in fraud prevention.
The consultancy further estimated that, even after accounting for the additional costs incurred by payment service providers, the policy is generating a positive short-term net economic benefit of between £17 million and £29 million, describing the estimate as a conservative assessment of its overall value.
Commenting on the findings, PSR Managing Director David Geale said the evidence demonstrates that the reimbursement regime is delivering its intended outcomes.
“The evidence is clear—APP reimbursement is working. Payment fraud losses are down, more victims are being reimbursed, and firms are investing in prevention,” he said.
Geale also dismissed concerns raised before the policy’s implementation that mandatory reimbursement could encourage reckless consumer behaviour or drive payment providers out of the market, noting that there is currently no evidence to support those predictions.
Despite the progress, the regulator acknowledged that APP fraud remains a significant challenge.
Recent industry figures indicate that fraudsters stole £1.28 billion across the UK in 2025, representing a four per cent increase compared with the previous year. Losses linked specifically to APP fraud rose 19 per cent to £576.4 million, with more than 248,000 reported cases. Personal customers accounted for £500.8 million of those losses, while businesses lost £75.6 million.
Geale stressed that the PSR remains focused on strengthening the framework and addressing inconsistencies in how reimbursement policies are applied across financial institutions.
“We are not complacent,” he said. “There is more to be done to ensure consistency in how consumers are treated, alongside a step-change in the approach taken by technology firms and telecommunications providers to stay ahead of criminals exploiting their platforms.”
The regulator said it will launch a public consultation before the end of the year to propose measures aimed at improving the consistent application of the reimbursement policy across the industry. Where instances of poor compliance are identified, the PSR said it will require firms to strengthen their practices.
As part of its broader anti-fraud strategy, the regulator also plans to publish new data identifying the online platforms most frequently used by fraudsters to target victims, with the aim of supporting a more coordinated cross-sector response to tackling fraud at its source.
Comments