Fraud refund rules: what they cover, and what they miss

What happened

Since 7 October 2024, UK payment providers have had to reimburse most victims of authorised push payment (APP) fraud, up to £85,000, unless the case falls into a narrow set of exceptions. It's a genuine shift: reimbursement rates have climbed from 61% at the start of the scheme to 88% in its first 18 months, according to the Payment Systems Regulator. Losses to this type of fraud are still rising though, up 19% to £576.4m last year, and the scheme only covers one type of payment.

What this actually means for you

The protection is real, but it's specific. It only applies if you were tricked into sending money via a UK bank transfer, through Faster Payments or Chaps. If you paid by card, cryptocurrency, PayPal, a money-transfer app, or sent money to an international account, you currently have little or no protection under this scheme. That matters because, in a Which? survey of people who believed they'd been scammed, only 31% had paid by bank transfer. More than half used a debit or credit card.

Even within the scheme's scope, outcomes aren't uniform. Around 30% of claims are rejected as out of scope, and the regulator doesn't publish a breakdown of why. Independent research found some providers reject as few as 2% of claims as "civil disputes" while others reject around 20%, without naming which. The regulator has also stopped publishing firm-by-firm league tables on reimbursement rates, so you can't easily compare providers before something goes wrong.

One case illustrates the gap: a nurse in Brighton lost €4,250 after booking what turned out to be a fake holiday rental, communicating with the "owner" over WhatsApp and paying an invoice to an account abroad. Her bank refused reimbursement, because the scheme's rules don't cover transfers to international accounts. That's not necessarily typical of most claims, but it shows how a payment method or destination outside the scheme's scope can leave you with no recourse under it.

What to do if you think you've been scammed

• If you paid by UK bank transfer, report it to your bank as soon as possible. Most claims made within the rules, and within the scheme's 13-month reporting window, have a reasonable chance of reimbursement; 63% of people who claimed under the scheme found the process easy.
• If you paid by card, cryptocurrency, PayPal, another money-transfer app, or sent money abroad, be extra cautious before you send anything. These payments sit largely outside the reimbursement scheme, so prevention matters more than recovery.
• If your bank rejects your claim, or you disagree with its decision, you can escalate to the Financial Ombudsman Service. It can award compensation up to £430,000, and in 2025 it upheld 30% of APP fraud complaints it received.
• Don't assume a small loss isn't worth reporting. Nearly a third of people who lost money to APP fraud didn't tell their bank, often because they thought the amount too small, blamed themselves, or didn't know the scheme existed. Reporting is what starts the clock on any possible reimbursement.
• Watch for the WhatsApp-and-invoice pattern. If a seller or landlord moves the conversation off the original marketplace and onto a messaging app before sending payment details, treat that as a warning sign, not a convenience.

What this does not fix

The reimbursement scheme is not a safety net for every kind of fraud. It doesn't cover card payments, cryptocurrency, PayPal or similar apps, or transfers to accounts abroad. It won't necessarily help if you're the victim of a long-running investment scam that only comes to light after the 13-month reporting window has passed; there's growing pressure to remove investment and cryptocurrency fraud from the scheme entirely rather than extend it. And while the Ombudsman remains a backstop, proposals under discussion could narrow what counts as "fair and reasonable" in its decisions, which would be a change worth watching rather than something that's already happened.

No scheme, and no tool, replaces caution at the point you're about to send money. A scam checker can flag a suspicious message or listing before you act. It can't undo a payment once it's gone, and it isn't a substitute for reporting fraud to your bank or, if needed, the Ombudsman.