Mobile app fraud has been plaguing consumers for several years. There are many possible attack vectors, yet receiving reimbursement is often complicated and never guaranteed. That will all change under new rules introduced by the Payment Systems Regulator (PSR).
Fighting App Fraud With Mandatory Refunds
Mobile app fraud is a type of fraud that occurs when someone uses a mobile app to commit a crime. This can include using a fake app to steal personal information, using an app to make unauthorized purchases, or using an app to commit identity theft. Mobile app fraud can impact victims in a number of ways, including financial loss, identity theft, and privacy invasion.
While these apps provide various consumer benefits, they also pose significant security risks. Moreover, when someone falls victim to app fraud, there is a 75% chance no reimbursement will come from the bank. That is a worrisome development especially given how banks attempt to maintain a “voluntary refund” approach. That only applies if the user is not to blame for the malicious activity, though.
PSR Managing Director Chris Hemsley adds:
“Fraudsters have continued to devastate the lives of innocent victims through APP scams. We want to see all banks, building societies and other payment providers doing more to prevent APP scams from occurring in the first place. These proposals will mean everyone has more protection from scams. Our proposed rules will see everyone benefitting from strong protections, regardless of who they bank with.”
Implementing these new mobile app fraud rules will undoubtedly meet some resistance. Banks are never keen on reimbursing even if the customer is not at fault. Moreover, the proposal still needs to be approved by the legislative forces. Such a process can take months, if not years, and even then, the industry might never put it into practice.