Which? helps make it happen
For starters, the UK government brought in its landmark Consumer Duty in 2022 to raise standards and deliver better outcomes for consumers when it comes to their dealings with financial institutions. Key obligations, which firms including their major banks must follow, are acting in good faith, avoid causing foreseeable harm and enable and support retail customers to pursue and realize their financial objectives (e.g., planning for a secure retirement).
One leading consumer group has had an instrumental part in not only convincing the UK government to bring in reforms like the one stated above but for regulators to move on reimbursing innocent victims of fraud with particular focus on what are called Authorized Push Payments (APPs).
Mandatory reimbursement has been in place now for over a year with one of the key components being a 50/50 share of responsibility for both the sending and receiving UK financial institution of a money transfer when it is clear the consumer was not involved in knowing they were being duped by a professional scammer.
The consumer organization is called Which? and it provides a strong advocacy role in the UK on behalf of consumers. As 2025 comes to an end, they remain very active on ensuring consumers have better outcomes with respect to their financial institutions. The highlighted link here takes you to a current campaign they have undertaken to stop the scam. If you scroll to the bottom of this scam prevention page, it indicates Which?’s work began in earnest in 2016 when they submitted to government a super-complaint. Here is the opening paragraph.
Today Which? launched a super-complaint to the Payment Systems Regulator (PSR). We are demanding that banks protect people from losing money when they have been tricked into making a bank transfer to a fraudster.
It goes on to say that “the banks should make sure their systems for protecting people are updated in line with the way bank transfers have developed for faster and larger payments. This is a difficult and complex issue, which is why the PSR needs to take action.”
A well-researched and documented study by Which? in 2022 entitled The Psychology of Scams is evidence-based in showing how anyone can be scammed in certain circumstances and situations. It makes it more urgent in addressing the prevention of scams, especially vulnerable groups like seniors who are less aware of how they are being targeted by scammers for nest eggs they have responsibly built over the years to help secure a comfortable retirement.
The study delves directly into understanding why victims of Authorized Push Payments fall for scams as it hired an independent research firm to interview 20 of them in 2022.
To gain a total understanding and appreciation of this study go to Which?’s The Psychology of Scams.
Consumers face significant risks due to numerous vulnerabilities in the systems they rely on daily. Social media platforms frequently host fraudulent advertisements, exposing users to scams and deceptive offers. Online marketplaces are also problematic, as they may sell counterfeit or fake goods, making it difficult for consumers to distinguish legitimate sellers from fraudsters. Additionally, telecom companies often allow scammers to spoof phone numbers, giving fraudulent calls an appearance of legitimacy. At the same time, banks sometimes permit fraudsters to operate accounts, further facilitating criminal activity, and enabling scams to go undetected for longer periods.
While these widespread enablers of fraud persist, the burden of prevention and financial recovery is frequently placed on the individual consumer. Rather than benefiting from robust systemic protections, consumers are often expected to avoid becoming victims through their own vigilance and, if targeted, to absorb the resulting financial losses on their own.
A system-wide approach is needed to stop the source of scams. Individuals need to play their part to prevent and report suspected fraud. But this needs to be focused on an understanding of human behaviour, rather than victim-blaming. It is also necessary to acknowledge that wrongdoing is part of the fraudster, and that people do not set out to be scammed. As Which? has long argued, the lack of consumer protection means there are insufficient incentives for banks and other payment providers to prevent authorized fraud. Addressing this gap in consumer protection is crucial to our attempts to prevent fraud as it is to provide a fairer system of allocating losses.
Around three in four cases that have been reviewed by the Financial Ombudsman Service since 2019 – a process that further adds to the emotional and financial strains on victims – have sided with the victim, highlighting the lottery of outcomes that victims still face. Research corroborates that it is both the personal circumstances of an individual and how the type and nature of the scam interacts with this that causes someone to be especially susceptible.
In doing so, they may also make us more susceptible to fraud. Scammers make many approaches to consumers. When they find someone in a distracted and vulnerable state, they exploit the opportunity ruthlessly.
There is an authority bias and one where humans are more likely to believe a statement to be true if offered by a person in authority, and to act upon what a person in authority says. If a scammer can successfully convince a victim they are an authority figure, such as their bank or the police, the victim is more likely to act compliantly. Victims also commonly told us how credible their scammers sounded.
In other cases scammers imitated ‘official procedures. For one victim in this study, the scammer asked a series of security questions as we have come to expect when speaking to our banks. Like spoofing, scammers acting in expected ways feed the victim’s rational mind, offering a range of logical cues that the call or approach is credible.
The case studies in Which?’s research consistently show that by manufacturing a sense of urgency, a scammer can invoke loss aversion or scarcity bias, overwhelming rational judgement and compel a victim to make a payment. Combined with tactics that build trust and credibility, urgency can reduce the victim’s ability to question what they are being told and can mean they are more likely to send money to a scammer.
A victim’s failure to act upon their doubts, therefore, does not reflect a lack of care, but the success of the criminal behaviour of the fraudster, who has created a situation where the victim is unable to tolerate doubt. It is not the victim choosing to ignore information or instincts, but rather them being unable to sit with conflicting information and seeking prompt resolution of their discomfort.
The study also found that during the scam itself, the scammer has two sequential strategies. The first is to build trust and credibility in the mind of the victim. This is done through imitating a trusted and credible person or institution and through building a relationship with the victim. To maintain and nurture these relationships and the hold they have over their victims, scammers also purposefully exclude others from the exchange, using secrecy to reinforce trust.
The second aim is to push the victim to make a transfer of money, which can be induced by creating a sense of urgency and by coaching the victim through the payment. These tactics make it exceedingly difficult for the victim to identify that they are being scammed, or to take action to protect themselves. Yet many of the victims that we interviewed, across a wide range of types of scams, were denied reimbursement.
A system-wide approach is needed to stop the source of scams. This should aim to prevent scammers from reaching victims in the first place, to maximize the chances of disrupting a scam in progress, and to ensure consumers are not held accountable for the criminal behaviour of scammers with adequate support and reimbursement. Individuals need to play their part too to help these systems prevent fraud, but this needs to be rooted in a better understanding of how fraudsters manipulate their victims and the psychological factors that mean consumers cannot be expected to consistently protect themselves against scams.
The study’s recommendations are specific to the UK but can be adapted to other Five-Eye countries like Canada, Australia and the US. Let us not forget other leading countries who are showing leadership such as Singapore and ones in the EU.
One take away from reviewing them is that financial institutions should be far less adversarial in how they approach customers who have become victims of APPs. Alternatively, they should be doing everything possible to prevent the scam from happening in the first place.
