October 7, 2025 marks the first year since the UK’s Payment System Regulator or PSR introduced mandatory APP fraud reimbursement rules. Although 88% (£112m) of losses under the policy have reportedly been returned to victims, the total value of claims increased from Q1 to Q2 2025, indicating that APP fraud still remains a serious problem.
Silvija Krupena from RedCompass Labs noted that high reimbursement rates look impressive, but fraud “remains rampant.” They added that policy shifts financial liability, “not criminal behavior, and more cross-sector accountability is needed.”
Tom Peacock from BioCatch said that reimbursement strengthens consumer protection, but “prevention is lacking.” Peacock further noted that effective fraud detection, behavioral tech, and collaboration “are key to stopping criminals before transactions occur.”
Krupena, Director of the Financial Intelligence Unit at RedCompass Labs added:
“A year into the UK’s mandatory APP reimbursement regime, the headlines of high refund rates may look impressive. But this isn’t evidence that fraud is under control; if anything, it’s evidence that we’ve built an expensive refund machine. Fraud volumes remain high, and criminals are still walking away with the same money; it’s just being reimbursed from banks’ pockets instead of the victims.”
They also mentioned:
“Before the rule came into force, around 62 % of victims under the voluntary model were reimbursed. So yes, the safety net has widened, but reimbursement is not prevention. The rule has shifted financial liability, not criminal behaviour. Until accountability is shared across the ecosystem of banks, tech platforms, telecoms, and law enforcement, we’ll keep recycling losses instead of stopping fraud at its source.”
Tom Peacock, director of global fraud intelligence at BioCatch also mentioned:
“The PSR’s mandatory reimbursement requirements have undoubtedly strengthened consumer protection, returning millions to victims and creating an incentive for banks to set up and invest in better fraud and financial crime detection. The policy has thus far struggled, however, to stop the underlying crime. PSR data shows a 15% rise in APP fraud between Q1 and Q2 of 2025, suggesting criminals remain undeterred.”
They further noted:
“Preventing scams before the transaction occurs must be the goal. This requires deploying better fraud detection tools and behavioural technology to decrease APP losses, cutting off mule accounts that enable such fraud, and engaging in meaningful cross-sector collaboration between regulators, banks and tech firms. The forthcoming independent review of the reimbursement limit will reveal how the UK intends to balance consumer protection, fraud prevention, and enforcing accountability. An emphasis on a more proactive, intelligence-led approach will be crucial in disrupting the scam economy at its source.”
It does appear that these measures from the PSR are a step in the right direction. But clearly, a lot more needs to be done to ensure adequate consumer protection. Fraud has indeed become quite rampant especially due to the rise of AI and various other forms of sophisticated tactics now being employed by malicious actors.