The Payment Systems Regulator’s (PSR) new authorised push payment (APP) fraud reimbursement rules are already changing the behaviour of scammers, the director of fraud prevention at NatWest has warned.

“We can see a shift from high value stuff to volume [and] we are seeing a lot of displacement into cards,” said Nick Perkins, speaking at UK Finance’s Economic Crime Congress on Thursday. “Every time you plug one set of gaps, you find some new ones.”

Perkins said the banking industry needs a collaborative response to these gaps. He said the APP regulation is a “progressive step” in addressing fraud but that it is only a small step on a longer journey.

Claire Simpson, senior manager of policy at the PSR, said that one of the unintended consequences of the organisation’s new policy is the increase in fraud in other areas of payments.

“It was an intended consequence that it would be harder to commit fraud via APPP over faster payments and apps, that’s quite intentional,” she said. “But we are the economic regulator for all payment systems so we are keen to engage on whether there is a significant shift and we’re now seeing that materialise.”

The PSR's new rules, which were launched on 7 October, require all UK banks, building societies, payments and e-money firms to reimburse victims of APP fraud up to £85,000. The regulator says that the vast majority of consumers can expect to be reimbursed within five business days of making a claim, with the scheme seeing more than 99 per cent of claims by volume covered.

Many firms have been actively implementing new technologies and collaborative initiatives to address APP fraud, including a recently launched tool developed by a consortium of the UK’s top banks and mobile network operators.

Simpson added that while the regulator has worked “incredibly hard” on the framework, it did not think that it would solve the problem of fraud entirely.

“What we wanted to do is ensure that we were focusing on the areas where we could really make sure those incentives were in place for the financial services industry so they could continue to evolve their approach to protecting consumers,” she said. “We need to recognise that as fraudsters’ tactics change and payment services providers adopt different tactics for addressing that, we need the requirements to do the same thing.”

Stephen Senior, head of financial crime at Leeds Building Society said that his organisation had not yet needed to settle a claim but saw itself as a part of a wider prevention strategy in the industry, adding that the organisation has spent lots of time on ensuring it can deal with the new requirements.

“We’ve been good at sharing data and we are monitoring a lot of red flags,” he said. “We are seeing people move to digital channels, whereas before they would have come into branch.”

Senior added that Leeds Building Society is intending to set up fraud hubs in branches to help educate consumers and offer help where required.

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