UK Trends and Developments Contributed by: Sarah Keeling, Piers de Wilde, Dmitry Sachkov and Alexander Greenall, StoneTurn
likely help UK companies to appropriately and proportionately calibrate their compliance pro - grammes. New APP Fraud Reimbursement Rules Authorised push payment (APP) fraud remains the most prolific scam in the UK. APP fraud occurs when a fraudster tricks a victim into mak - ing a payment from their account to the fraud - ster’s account. According to UK Finance’s most recent data, APP fraud accounted for GBP459.7 million in losses in 2023. In October 2024, new UK reimbursement rules for APP fraud came into effect. Before this, the process of victims seeking reimbursement from their banks could be challenging because a vol - untary code for banks led to inconsistent out - comes, with many victims not getting appropri - ate compensation, if any. The new rules stipulate a set of principal safe - guards applied to all payments made via Faster Payments or the Clearing House Automated Payment System (CHAPS), both of which are common types of bank transfers within the UK. First, all UK payment service providers are obliged to reimburse all victims of APP fraud who pass the eligibility test (which is that they were not grossly negligent). Second, victims are generally entitled to get reimbursed within five business days of reporting. Third, although it is the victim’s bank that issues a refund, this lender is eligible to reclaim 50% of this amount from the fraudster’s bank. Finally, refunds are capped at GBP85,000 per claim. The cap has become a contentious point since it is nearly five times lower than the originally proposed cap of GBP415,000. Following a Pay - ment Systems Regulator (PSR) consultation, the cap was reduced amid fears that banks would
be less likely to chase stolen sums under the threshold, which would then encourage fraud - sters to target higher rewards. The PSR argued it was not practical to set a higher cap since 99% of APP fraud incidents are under GBP85,000. This is likely because this revised cap is identical to the government-backed Financial Services Compensation Scheme’s compensation level for deposits and insurance policies. The new reimbursement rules fundamentally shift fraud loss responsibility from customers to banks. This change is expected to incentivise financial institutions to ramp up fraud preven - tion controls to deter scams in the first place. While the rules apply to individuals and small businesses, large corporates as well as cross- border payments are not covered. Legal action remains the primary recourse for these cases (or if a victim’s loss is over GBP85,000). First Unexplained Wealth Order Obtained by the Serious Fraud Office In January 2025, the Serious Fraud Office (SFO) secured its first ever unexplained wealth order (UWO) since its introduction in 2017. UK gov - ernment agencies can apply for an UWO to the High Court in respect to any asset worth over GBP50,000 when there are reasonable grounds to suspect that the known sources of the respondent’s lawfully obtained income would have been insufficient for them to acquire the asset, or that the asset was obtained through unlawful conduct. If granted by the court, the UWO effectively forces the respondent to prove that the asset had been acquired legitimately. Otherwise, they risk forfeiture proceedings. Only a handful of UWOs have been granted by courts since 2017 – all of them to the UK National Crime Agency (NCA). The initially slow growth of successful UWOs was hit by the 2020
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