Banks must improve anti-fraud controls to fight APP scams.

Will the new rules be enough to tackle APP fraud, or will it simply cause more problems? Now, more than ever, banks need to innovate and educate to keep one step ahead of the fraudsters.

In a monumental move that has been applauded by consumer protection groups, the Payment Services Regulator (PSR) has mandated that from October 7, victims of Authorized Push Payment (APP) scams in the UK must be refunded (up to £85,000) by the account holder’s bank within a maximum of five days. 

This amount of £85,000 is significantly lower than the originally proposed £415,000, which was initially met with reservations by the UK Payments Association that it would “threaten the viability of smaller payment companies” . Other concerns were expressed by trade association, UK Finance, which feared the move would encourage more ‘complicit fraud’ and incentivize fraudsters to claim compensation money.  

However, for the customer, especially those who have fallen victim to APP scams, the move could not have happened sooner. 

This is positive news for UK victims of the APP scam, who for too long have often had to deal with the additional stress of attempting to have their money refunded.

Grigory Yusupov, Regional Director of UK at IDnow.

“This landmark decision should act as a reminder of the responsibility that banks have to their customers and a wake-up call to ensure their fraud-prevention and identity verification tool stack is fit for purpose, especially for social engineering-type attacks.”

It is hoped that the move will go some way to reducing the amount lost to APP scams, which in 2023 was estimated at a whopping £459.7 million.

A positive step forward – for the customer at least.

Before the recent ruling, there was no guarantee that victims of APP scams would be refunded, or who they should even turn to for help. For the unlucky few whose bank refused to refund, their last call was often to the Financial Ombudsman Service (FOS).  

From April to July 2024 there were 8, 734 complaints about fraud and scams, half of which were regarding APP scams. This was a significant increase on the same period of 2023 (6,094). 

The year on year rise in APP scam complaints can be attributed to; 

  • Increase of ‘multi-stage fraud,’ which sees funds pass through numerous banks, resulting in consumers submitting multiple claims.  
  • A growth in people inadvertently using their credit or debit cards to pay fraudsters, which are not covered by the Contingent Reimbursement Mode code or the new PSR rules. 
  • More online fraud cases submitted by professional representatives, including claims management companies.

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What is an APP scam?

While there are many different forms of APP scams, the end goal is always the same: to deceive individuals or businesses into sending money by fraudulent means. One of the most common forms of APP fraud is a romance scam. Read the story about how one British woman made it her mission to expose the romance scammers and even wrote a book about how she did it.

Other forms of APP fraud include: 

Purchase scams, where victims use a fake website or link in an attempt to purchase goods or services. 

Impersonation scams, where criminals pose as a well-known company or brand, such as a delivery firm, retailer or even HM Revenue & Customs and claim they have a parcel or bill that needs to be settled, for example. 

Investment scams occur when victims are duped into sending funds to a fraudster posing as someone with a ‘too good to be true investment.’ 

Read the story about how one man was contacted on Linkedin with ‘the offer of a lifetime,’ and proceeded to lose almost a million dollars.  ‘The rise of social media fraud: How one man almost lost it all.’ 

There are many others, including loan fee scams and lost pet scams. In fact, there are new APP scams created regularly, which is one of the reasons why APP scams are so dangerous and why the FOS is kept so busy. 

“Fraudsters’ methods are always evolving, and we continue to see that reflected in the complaints brought to our service,” said Pat Hurley, Ombudsman Director for Banking. 

“We are currently receiving – and resolving – around 500 fraud and scam complaints a week. In all the cases we receive, we’ll look at the individual circumstances and investigate whether a business did everything it was required to do. When we do uphold complaints, we expect firms to learn from our findings and apply them to any future interactions with their customers.”

What are banks currently doing to tackle APP fraud?

For banks, preventing APP fraud can often feel like a frustrating game of ‘Whac-A-Mole’; where after finally addressing and educating their customers on one form of APP fraud attack, a new variant suddenly springs up. This is why many banks employ AI to monitor transaction behaviors and cross reference historical spending patterns to flag potentially fraudulent activity. However, relying solely on AI can sometimes result in false positives or missed cases of social engineering. 

In general, banks tend to rely on specific risk signals, which are used to ascertain if a) the transaction is valid and authorized by a trusted account holder or b) the flagged activity is a genuine risk. However, as APP scam payments are authorized by the account holder, a regular bank’s defense systems do not necessarily flag such transactions as anomalies.  

From October 7, banks will be able to pause transactions for up to 72 hours when there are “reasonable grounds to suspect a payment is fraudulent.” Previously, banks had to either process or refuse a payment by the close of the next business day.

UK Fraud Awareness Report

Learn more about the British public’s awareness of fraud and their attitudes toward fraud-prevention technology.

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Can customers do anything to protect themselves against APP scams?

Of course, new regulations like October 7’s ruling may go some way to lessening the impact of APP fraud, by forcing banks to be held responsible, but as APP fraud appeals to human naivety, it can be particularly difficult to protect against. However, there are steps customers can take to protect themselves:

  • Too good to be true? If the offer or investment sounds too good to be true or is too cheap to be true, then there’s a good chance it probably is.
  • Is that really you? Is the bank, delivery company or even Keanue Reeves really contacting you? Fraudsters will impersonate anyone. If you’re unsure that the real company is contacting you, get in touch via official channels to check!
  • I beg your pardon? Fraudsters know that it’s often only a matter of time before people cotton on to the deception, which is why they tend to pressurize people to authorize payments as soon as possible.
  • How do you want to pay? If a company or person you have dealt with before is asking you to transact via a different payment method, then this is a red flag. 
  • Why do they want that? Do not give passwords or addresses or any other Personal Identifiable Information out over the web.

Why are APP scams so common?

The main reason why APP scams have become so commonplace and pose such a threat to the public isn’t because they are particularly sophisticated – after all, APP scams are essentially just social engineering. According to Lovro Persen, Director of Document and Fraud at IDnow, it is the sheer scale of attacks that people are subjected to that makes APP scams so dangerous. 

It’s a numbers game. We know that if fraudsters send 10 APP scam messages, they are unlikely to catch anyone, but if they send 10,000 messages, statistically there will be people who bite.

Lovro Persen, Director of Document and Fraud at IDnow

More must be done to raise awareness of the dangers of APP scams, especially with the more vulnerable groups like the elderly or the desperate.On paper, the decision to make compensation compulsory is positive, however, I do worry that banks may need to raise interest rates on loans and other services to make up for the loss of profit. In this regard, the financial compensation will affect the bank’s bottom line even more than it currently does.”

So, will compulsory compensation stop APP fraud?

Clearly, the fight against APP fraud is one that will not simply end on October 7. In fact, according to UK Finance, it may even make it worse: 

“We continue to express the opinion that the PSR’s approach may encourage more complicit fraud and exacerbate the APP risk as fraudsters capitalize on a reimbursement model which requires minimal consumer evidence, nor demonstration of consumer caution and a limited opportunity for payment service providers to investigate and challenge the consumer claim. This will inevitably increase the attractiveness of the UK to criminal entities.” 

The battle against APP fraud will not be won overnight. It will require regular regulatory updates to protect the industry. It will need a commitment from banks to educate their customers on the dangers of different forms of APP fraud. It will also require banks to innovate with new methods of fraud detection to not only protect their business bottom line and their customers but also ensure the customer journey is not too dramatically impacted.

How video identity verification can add an additional layer of protection against APP fraud.

While there will always be fraudsters on the lookout for new and inventive ways to deceive unsuspecting members of the public, banks have a responsibility to make it as difficult as possible for them. 

As APP fraud relies so heavily on real-time social engineering, a hybrid approach that combines automated detection with real-time human verification can provide an extra layer of defense and help to spot potential coercion. For example, when certain high-risk triggers are detected, such as unusually frequent payments to a new payee or a large, unexpected transaction, a live video verification session can be initiated to verify the transaction before it proceeds. 

This allows the agent to ask specific questions to verify the legitimacy of the transaction and identify potential fraud tactics, such as: 

“Can you explain the purpose of this payment?” 

“Have you been in contact with this payee before?”

“Is there any urgency pushing you to authorise this payment?”

VideoIdent Flex is designed to detect fraud at critical touchpoints, offering seamless real-time video verification for high-risk transactions. This solution is not only effective for onboarding and authentication but also plays a vital role in preventing APP fraud at the point of transaction. By combining AI risk scoring and live agent verification, banks can ensure that suspicious transactions are flagged and reviewed before being authorized.

Interested in more information about VideoIdent Flex? Check out our recent blog, ‘How video identity verification can help British businesses finally face up to fraud.’

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Banks urged to improve anti-fraud controls as APP scam compensation becomes compulsory. 1

Jody Houton
Senior Content Manager at IDnow
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Poker Strategies to Improve Your Decision-Making Skills

Numerous strategies exist that can help poker players refine their key cognitive choices, and with any slight edge in the game being huge in 2024, we’ve taken a look at some of the ways you can take your decision-making in poker to the next level.

KEY MOMENTS WHERE THE PRESSURE IS ON

Every poker player worth their salt sits down at the table prepared to bring their A-Game, and in the key moments, make the right decisions. Not everyone can do that, of course, but the first thing to establish is what those key moments actually are. It is impossible to remain focused for a 12-hour day at the poker felt, so ascertaining what makes an important decision is vital.

Chess players often speak about focus being a movable scale rather than a binary ability that, like a switch, is either ‘on’ or ‘off’. Focus can be soft or hard in poker too. An example of soft focus might be the sort of spot where you’re not involved in a poker hand, but when the players who are reach showdown and have to display their hole cards, you make sure to look up from your phone and take note of these shown cards. Hard focus might be an all-in hand you’re involved in where either your stack or your opponent’s ends up being totally at risk.

Determining what should demand your total focus is a personal opinion, but it can often be summarized as a decision that has a big effect on your own place at the table or someone else’s. The biggest moments in your favorite poker shows are likely to tell you what those are. We’ll all remember where we were when Vanessa Selbst couldn’t quite find the fold with a full house in the first level of the WSOP Main Event against Gaëlle Baumann. We can probably all recall the first time we saw Erik Seidel’s call after Johnny Chan’s infamous ‘Look to the Sky’ in the 1988 WSOP Main Event.

The big moments require total focus. Would Selbst or Seidel have acted differently with a better ability to focus? Those hands are tough to formulate a cohesive plan of attack in and marginal when it comes to the final decisions, so it is unlikely. But unless you find yourself deep in an event you could win millions in, your own ‘hard focus’ moments are likely to be simpler – if you put yourself in the position to make optimal strategic decisions.

Emotional Control: Pre-Match Preparation

Every poker player must prepare for a poker tournament or cash game in the right way. For some, this will be a large bank of sleep to preserve their mental energy for the big moments. For others, such as Tight Poker columnist and former champion ultra-runner Dara O’Kearney, it could be invigorating the mind and body with a long run in the days before a major event.

Whatever your method, pre-match preparation to put your mind, body, and soul in the right place is vitally important. Poker decisions made by a tired mind will be lacking. Physical stamina is important late in days when events are won and lost or when the biggest cash game pots are scooped. Feeling comfortable and in the right mental state to execute decisions effectively is pivotal to making a profit in poker.

There are any number of ways of preparing yourself, but few are better than the old adage that you are the sum of two vital human basics – what you eat and how you sleep. Mastering a good routine in both respects is crucial. With nutrition and rest, the twin pillars upon which to base your preparation, how you plan for a cash game session, multi-table tournament (MTT), or live event is almost a case of trial and error. You can read about what others do, but your own gauge of how each process refinement affects your performance (short-term) and results (long-term) will be key.

I once asked an elite player who won a lot of money playing online poker how he prepared for a final day in a big SCOOP, WCOOP, or other such MTTs. He replied with one of the most unique answers I ever heard to such a simplistic kind of question. He said that around an hour before the final day – or any poker session! – kicked off, he would go out into his garden armed with a blindfold. He would scatter a selection of items in his garden and take a mental picture with his mind.

Then he would put the blindfold on and attempt to walk to the end of the garden, touch the fence, turn around, and come back to his back door. If he struck an object in his path, he would have to start again. When he made it all the way to the fence and back without striking any objects, he would remove the blindfold and be ready to play.

The Power of Mathematics

The 17-time WSOP bracelet winner Phil Hellmuth once responded to questions about his mathematical capabilities by confidently declaring that he knew the odds of any poker hand to within two decimal places. The answer may have owed a little bravado to the formative era of The Poker Brat, but there was an element of truth to it too. Hellmuth’s math knowledge was so good that his victory in the WSOP Main Event of 1989 changed the game and allowed those who focused on numbers to take incrementally large steps forward in the game of poker.

In this fresh era of GTO (Game Theory Optimal) play, mathematical ability is infinitely more important to this day. Poker, by its very definition, is a sum game that relies on incomplete information being interpreted by the players involved, and only by understanding the odds and probabilities of certain cards coming can you make correct mathematical decisions.

From push-fold charts to post-flop strategy, studying the numbers is often time-consuming and a difficult theory to immerse yourself in. Breaking it down into bite-sized pieces of advice to digest is important, as is taking in the information in a format that your brain responds to positively. From video training to strategy books, via tactics discussed on podcasts to online articles such as these, doing the work is vital, so make sure you do it well.

Adapting to Opponents: Examples of Key Decisions

Poker is full of tough decisions, but if you build up a list of questions in your mind ahead of those decisions approaching then you’ll be best prepared to deal with them when they come along. The first consideration you should make is towards your opponent, with the player more important than the cards you’re taking on at all times. Ask yourself how they are playing, whether they have been aggressive or passive and whether they are stepping out of character with their behavior in the current hand.

Once you have a handle on your opponent(s) emotionally, consider your own perceived image to them. Are they displaying any tells or behaving in a way that is dramatically different from their previously demonstrated patterns? Also consider your table position in relation to your enemy – then you’ll be able to appraise the situation in a more strategic manner and take advantage of any weakness.

Poker is all about gathering relevant information and making the best decision based on that data. Using logic, you’ll then be able to make that key decision with as much confidence as you can possibly have. From there, the cards will decide.

Being a Hero

Key decisions are often those moments where outside observers will look back on and say either ‘How did they make that call?’ or “What a great fold – how could they lay that down?’ Making the Hero Call or the Hero Fold is tough and will often be decisive in how your major result came around. Look at the past WSOP Main Events and you can probably remember an amazing fold or hero call that the champion made.

Making a big lay down is essentially laying down a really good hand when you have worked out that your hand is still beat by one that is even better. While it is hard to have any kind of strategy that declares ‘I’m going to make a hero fold/call today’ at the beginning of the action, you should certainly be confident that should it come down to it, you can make that tough decision. These often come from the gut, that part of you that just knows you’re losing or winning in a certain spot.

I once spoke to the great Sam Razavi, a British poker professional who has made a career making huge plays. In one particular tournament, he won solely the title and around $50,000 in prize money purely because he made one great bluff at a key moment. He’d worked out his opponent’s hand down to almost the exact cards and followed through on his gut feeling with total conviction.

Sam told me that gut feeling was really the accumulation of knowledge over time and your brain then telling you that for reasons based on cognitive ‘muscle memory’, you can make the right call. Should you be wrong, that supposedly impulsive instinct is then refined over time, and your gut feelings then become more informed, often without you being fully conscious of the thought process.

We’d all like to do such things but jumping across that ‘Execution Gap’ between believing we are doing the right thing then actually pulling the trigger is much harder than it sounds.

Taking on Tilt

Let’s talk about tilt. Not just in your own game, but in that of others too. Tilt in poker is reacting emotionally to a poker hand and letting that emotion affect the next hand or even several after. This is often associated with taking a bad beat. Let’s say you are all-in with pocket queens against the pocket sevens of a player with three-quarters of your stack in a big live event. As all the chips are committed pre-flop, another player tells the at-risk player with sevens that they folded a seven too. Then, a seven lands on the river, and you’ve lost a huge chunk of your stack to a one-outer.

That kind of bad beat could easily affect you thereafter. Down from possibly 200 big blinds to under 30, you’ll have to adjust your play accordingly and have fallen a long way back down the ladder despite playing the hand perfectly. Overriding the sense of justice is difficult, and you will need to strategize completely differently, possibly for hours or days of the event. Getting over this ‘tilt’ feeling is hard, but it can be just as hard if you go on a series of hands when you’re winning. Can you still play your A-Game and not dust off chips needlessly through a sense of overconfidence? It’s crucial that you do, but ‘Winner’s Tilt’ is a thing, having recently been referenced in Daniel Negreanu’s look back at why he had a losing 2023.

Getting a handle on your emotions is crucial to success at the poker table. One thing that many players don’t consider, however, is how to exploit this tilt in others’ behavior. If you notice someone tilting, either from winning a pot or losing one, make sure that you take advantage. Charge them more with your bet-sizing if they’re splashing around with newly won chips. Punish their loss-chasing mentality if they’ve been on the wrong end of a bad beat, particularly if it was to you.

It is pivotal in poker that if you are to have any success, then the greatest strategy is to separate the decision you’re making from the outcome of that action. Being as objective as you can while retaining an emotional balance is going to help you stay on the right side of tilt in your own mind and crucially, take the maximum in chips from those who are unable to do so.

In Conclusion

Understanding negative triggers to your own A-Game and exploiting those weaknesses in others’ games is the optimal strategy when making key decisions. Being comfortable in those marginal moments can often come down to a ‘gut feeling’ that is refined over time by your own experiences at the felt.

Executing key decisions at the poker felt comes down to a focus – both hard and soft – on making positive decisions and not focusing on the consequences but refining the process of your decision-making skills. The 10-time WSOP bracelet holder Erik Seidel was coaching the comparatively inexperienced poker player and author Maria Konnikova.

When she told him about the decisions she was making and the result of the hands, he asked her to leave out the part where chips were won or lost. All that mattered was the decision, the process, the execution, the work. The chips will fall where they may, but if you keep improving your strategy in making key decisions, over time you’ll always win more than you lose.