Key Takeaways
- The Supreme Court in Philipp v Barclays [2023] UKSC 25 confirmed banks are not liable for authorised push payment (APP) fraud losses if you instructed the payment, even if you were tricked.
- APP fraud bank liability is limited: your bank is only required to reimburse you for unauthorised payments under the Payment Services Regulations 2017, not payments you approved yourself.
- From 7 October 2024, a new mandatory reimbursement scheme means banks will have to reimburse some domestic APP fraud victims for losses, but only applies to UK Faster Payments made by consumers, charities, or micro-enterprises.
- International payments, larger business transfers, and APP fraud cases occurring before October 2024 are not covered by the new reimbursement rules, so most victims cannot recover losses via their bank.
- If your bank refuses to reimburse you, collect all available evidence, make a formal complaint, and escalate your case to the Financial Ombudsman Service promptly.
- The Quincecare duty only protects customers when an agent (such as a company director or attorney) instructs the bank to make a payment and is suspected of fraud, not when you, the account holder, authorise the transfer yourself.
- Taking no action means you are highly unlikely to recover stolen funds; delay also reduces your chances of success in complaints or recovery proceedings.
- Evidence of responding to scam warnings or ignoring police advice may count as gross negligence and can affect your eligibility under both reimbursement schemes.
- If you still have a dispute or your situation is complex, our solicitors can assess your case, protect your rights, and represent you throughout the claims process to achieve the best possible result.
If you need help with an APP fraud loss, our expert lawyers at Go Legal can review your options. Book a free consultation or call 0207 459 4037.
Are Banks Ever Liable for APP Fraud Losses in England & Wales?
Many people believe their bank will shield them if fraudsters trick them into transferring money out of their account. However, after the Supreme Court’s ruling in Philipp v Barclays Bank UK PLC [2023] UKSC 25, in cases of authorised push payment (APP) fraud, the law usually does not require banks to reimburse victims who personally authorised the transfer, even if they were deceived. APP fraud bank liability is therefore very limited unless the payment was truly unauthorised.
This guide details what the Supreme Court held in Philipp v Barclays and how it shapes your rights if you lose money to APP fraud. You will discover why most claims against banks for APP fraud fail, what redress options remain under current and new rules, and precisely when banks must (and must not) pay out. We cover the new mandatory reimbursement scheme from 7 October 2024, exclusions for international payments, the role of the Financial Ombudsman, and the importance of gathering evidence and acting swiftly.
If you want specialist guidance on challenging a rejected APP fraud claim or have a complex situation, our solicitors can advise you on the best next steps.
Are Banks Liable for APP Fraud Losses After Philipp v Barclays?
Banks in England & Wales are generally not liable for APP fraud losses where you authorised the transfer yourself, even if a fraudster deceived you. The Supreme Court’s judgment in Philipp v Barclays Bank UK PLC [2023] UKSC 25 confirmed that once a customer gives an authorised instruction, the bank’s duty is to follow it promptly and the bank is not required to second-guess your decision or block the payment, even if there are warning signs. Unless a recognised exception applies, the bank will not be held responsible for your APP scam losses.
If you need step-by-step guidance for an APP fraud loss, our Banking & Finance Disputes team can help.
What Is Authorised Push Payment (APP) Fraud and Why Is It Different?
Authorised push payment (APP) fraud occurs when you are tricked into instructing your bank to send money directly to criminals. What makes APP fraud different is that you personally authorise your bank to move the money, albeit under false pretences.
By contrast, unauthorised payment fraud arises when criminals access your bank account or card and make payments without your agreement. This distinction is crucial. If the payment is unauthorised, the bank must refund you under Payment Services Regulations 2017, reg 76(2) (Philipp, para 17). With APP fraud, there is no such automatic right to reimbursement, because you issued the instruction yourself, even if you were misled (Philipp, para 18).
What Types of APP Fraud Put My Bank Account at Risk?
- Impersonation scams (fraudsters posing as your bank, police, or a regulator to claim your funds need moving)
- Invoice fraud (criminals intercepting or altering legitimate payment instructions)
- Romance scams (building online relationships before inventing emergencies to request money)
- Investment scams (convincing you to transfer savings to fake investment schemes)
- Business and mandate fraud (criminals impersonating colleagues or suppliers to induce you to change payee details)
Why Does the Difference Between Authorised and Unauthorised Fraud Matter?
This distinction determines if your bank must reimburse you. If a payment was unauthorised—made without your agreement—the bank is obliged to refund your loss. For APP fraud, you gave the instruction personally, and banks have no automatic duty to reimburse, as confirmed in Philipp (paras 17–18).
What Actually Happened in the Philipp v Barclays Case?
In Philipp v Barclays Bank UK PLC [2023] UKSC 25, the Philipps fell victim to a sophisticated APP scam. They believed they were protecting their savings by taking part in a fraud investigation, persuaded by someone impersonating law enforcement. Acting on those instructions, they attended their Barclays branch and transferred £700,000 in two payments, confirming their intentions both in person and over the phone.
How Did the Fraud Occur and What Steps Did the Victims and Bank Take?
The fraudster used number spoofing to make calls appear official. Despite being warned in person by a genuine police officer, the Philipps continued to act on the fraudster’s instructions. Barclays completed both transfers after getting direct confirmation from Mrs Philipp, as the law and its procedures required. Only after official police notification was the account frozen—by then, most of the funds were irrecoverable, having left the country.
What Legal Question Did the Supreme Court Decide in Philipp v Barclays?
The Supreme Court considered if a bank is legally obliged to refuse an authorised payment instruction where it suspects its customer is being defrauded.
What Duty Did Mrs Philipp Argue Her Bank Owed?
Mrs Philipp claimed the bank owed her a duty at contract and common law to refuse suspicious payments if there was reason to believe a scam was happening. She asked the Court to extend the “Quincecare duty”—which applies where an agent (for example, a director or attorney) tries to defraud the customer—to cover cases where the customer, as account holder, is tricked into authorising the payment themselves.
How Did the Courts Decide at Each Stage?
The High Court dismissed the claim, finding no such duty existed. The Court of Appeal allowed the appeal, holding a potential duty could arise and the issue should proceed to trial. The Supreme Court reversed the Court of Appeal, ruling the bank was not legally required to refuse such payments.
What Is the Quincecare Duty and Why Doesn’t It Protect APP Fraud Victims?
The Quincecare duty obliges a bank to make reasonable inquiries where it receives a payment instruction from an agent of the account holder (such as a company director) and there is some reason to doubt that agent’s authority or honesty. The duty only applies if it is questionable whether the agent is genuinely authorised.
In APP fraud, as in Philipp, the account holder gives direct instructions (even if deceived). The Supreme Court made clear the Quincecare duty does not apply in these circumstances, because the bank’s task is only to check for clear authority over the account. Banks are required to execute explicit instructions—even where the customer has been misled into making the request.
Does My Bank Have to Refund APP Fraud Losses After Philipp v Barclays?
After Philipp, banks are not obliged under law or contract to refund APP fraud losses where you personally authorised the payment, even if you acted under deception. Unless your payment falls within a specific regulatory reimbursement scheme, your bank is not liable.
The only clear exception is for “unauthorised” transactions under the Payment Services Regulations 2017, where a strict refund duty applies.
Is There Any Way a Bank Can Be Liable for APP Fraud Under Common Law?
Common law liability for APP fraud only arises if the payment was made by an agent and the bank had grounds for suspicion. The courts have held in cases such as Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363 and Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2019] UKSC 50 that banks can be liable where they ignore red flags presented by an agent’s request. The Supreme Court in Philipp confirmed there is no duty in cases where the account holder themselves issued the instruction, whatever the circumstances.
What Are the New APP Fraud Bank Reimbursement Rules from October 2024?
From 7 October 2024, new regulations require banks and payment service providers to reimburse eligible APP fraud victims, provided the transfer was made via the Faster Payments System and the victim is a consumer, charity, or micro-enterprise. These rules represent a major change from the previous law.
The Payment Systems Regulator confirms these protections apply to payments made on or after 7 October 2024, and banks must ensure compliance for eligible domestic transfers.
Which Payments and Victims Are Covered by the Mandatory Scheme?
You may qualify for reimbursement if:
- You are a consumer, charity, or micro-enterprise.
- The scam involved a payment via the Faster Payments System after 7 October 2024.
If you are unsure whether your payment qualifies, our solicitors can clarify your eligibility and help you prepare the strongest possible claim. For more insights, see Fraud Claims & Asset Recovery.
When Will an APP Fraud Claim Be Excluded Under the New Rules?
A claim can be excluded if the bank finds the victim acted with “gross negligence”—for example, by ignoring explicit scam warnings or disregarding advice from the bank or police.
APP Fraud Claims Process: Step-by-Step Guide From Fraud to Final Resolution
Responding fast after APP fraud is essential. The investigation, recall, and complaint process benefits those who act quickly and keep clear records.
What Evidence Should I Gather Immediately After Discovering APP Fraud?
Assemble:
- Bank statements showing transfers
- All call, text, or email communications with the fraudster
- Screenshots or printouts of those communications
- A clear timeline of the incident, detailing all steps taken
- Copies of communications with your bank and any police incident report
How Do I Make a Formal APP Fraud Claim With My Bank?
To begin a claim:
- Contact your bank’s fraud or emergency line straight away.
- Provide all your evidence, including a timeline.
- State the date, amount, and payment method—this is critical for the post-October 2024 rules.
- Ask the bank to use every means available to recall the payment.
Act without delay. No statutory claim deadline is set for victims, but delay reduces your prospects.
How Do I Escalate to the Financial Ombudsman Service or Complain Further?
If your bank rejects your claim or is too slow, escalate to the Financial Ombudsman Service (FOS). FOS has broad powers to review bank refusals, decide what is fair, and may order compensation even outside strict legal duties.
No minimum or maximum ombudsman timescales are fixed by law, so always escalate promptly if you encounter difficulty.
What If My Claim Is Rejected or Delayed? Can I Take Legal Action?
If your claim is denied and FOS cannot assist, you may consider litigation. However, following Philipp, unless you can prove your payment was made by an agent and the bank should have been suspicious, success is very unlikely. Take expert legal advice before attempting court action.
Are APP Fraud Claims Different for International Transfers and Business Payments?
Yes, major exclusions apply. The new reimbursement scheme covers only domestic Faster Payments and only if the payer is a consumer, charity, or micro-enterprise. Larger businesses and international transfers remain excluded, as do transactions before 7 October 2024.
What Types of Payments Are Excluded From the Mandatory Reimbursement Scheme?
Mandatory reimbursement does not apply to:
- Larger business payments
- International or cross-border transfers, or those outside Faster Payments (such as CHAPS or SWIFT)
- Payments made before 7 October 2024
- Cases where the bank finds gross negligence, such as ignoring clear scam warnings
What Laws and Regulatory Rules Apply to APP Fraud Bank Liability?
Liability for APP fraud is determined by:
- Philipp v Barclays Bank UK PLC [2023] UKSC 25: confirms the bank’s strict duty to execute customer instructions, not to block even suspicious payments.
- Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363; Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2019] UKSC 50: clarify duties where an agent is acting for a customer and suspected fraud emerges.
- Payment Services Regulations 2017, reg 76(2): requires refund of unauthorised payments.
- Financial Services and Markets Act 2023, s.72: enables the new mandatory reimbursement scheme.
- Payment Systems Regulator rules (from 7 October 2024): specify eligibility for scheme reimbursement.
- Consumer Rights Act 2015, s.62: controls unfair contract terms but is not an APP fraud remedy.
- The Financial Ombudsman Service: provides a review and compensation route beyond the strict letter of the law.
This creates a multi-layered landscape—strict legal rules, supported by regulatory and complaints procedures.
What Happens If I Ignore APP Fraud or Delay My Claim?
Delaying your response to APP fraud significantly lowers your chances of recovery. Immediate action maximises the possibility of recalling or freezing the payment, and crucial evidence is preserved. Delay can mean lost records, overseas dissipation of funds, and missed window for reimbursement or complaint.
Our Approach to APP Fraud Bank Liability Disputes
Our specialist solicitors at Go Legal guide individuals and businesses through all aspects of APP fraud disputes. From first discovery, we advise on preserving evidence, building your complaint and escalating to your bank or the Financial Ombudsman Service where needed. For complex or high-value cases, our litigation and asset recovery team assists with cross-border recovery strategies. We keep you informed throughout, adjusting our approach as laws and regulations develop.
If you would like more detail on handling complex banking disputes, visit our Banking & Finance Disputes, Commercial Litigation, or Consumer Rights pages.
Frequently Asked Questions
Can I sue my bank if I lose money to a push payment scam?
Generally, no. The Supreme Court’s decision in Philipp v Barclays Bank UK PLC [2023] UKSC 25 confirms there is no legal duty for banks to refuse an authorised instruction, even where fraud is suspected.
Does my bank have to stop a payment if it suspects fraud?
No. Unless your payment was made by an agent and the bank had reason to suspect the agent, the bank must follow your direct instructions.
What is the Quincecare duty and who does it protect?
The Quincecare duty only applies if an agent (not the account holder) authorises a payment and the bank has reason for suspicion. It does not cover APP fraud where you act yourself, even if deceived.
Are business and charity victims treated differently in APP fraud claims?
Yes. Only consumers, charities, and micro-enterprises qualify for the mandatory reimbursement scheme from 7 October 2024. Larger businesses are excluded.
How do I know if my payment was “authorised” or “unauthorised”?
A payment is “authorised” if you gave the order, even if tricked by a scam. “Unauthorised” means someone else took money from your account without your approval.
Will I get reimbursed if the fraudster used an overseas account?
No. Only domestic Faster Payments are covered by the new APP fraud reimbursement scheme. International and CHAPS payments are excluded.
What if the fraudster was someone acting on my behalf, not me?
If an agent (such as a company director or attorney) provided the instruction and the bank had grounds for suspicion, you may have a claim under the Quincecare duty.
What documents or evidence do I need for a successful APP fraud claim?
Gather all relevant records: messages, calls, emails, bank statements, and any official warnings or crime numbers.
What happens if my bank rejects my claim under the new scheme?
Escalate your complaint to the Financial Ombudsman Service, which can review the bank’s process and, if fair, may order reimbursement.
Can I still complain to the Financial Ombudsman Service if my bank declines my refund?
Yes. The FOS is an independent recourse for review and can decide on fairness, even where legal liability is disputed.
Get Expert Advice on APP Fraud Bank Liability
Knowing your rights after APP fraud is vital, particularly since Philipp v Barclays. The law sharply distinguishes between authorised and unauthorised payments—banks in England & Wales are not obliged to stop or refund a transfer if you expressly authorised it, even if you were tricked. From October 2024, new rules give better protection to consumers, charities, and the smallest businesses for domestic Faster Payments fraud. Acting quickly and compiling strong evidence are your best strategies for any recovery.
If you or your business has lost money to APP fraud, our solicitors can review your case, assess recovery chances, and support you through the complaint process or reimbursement claim. Call us on 0207 459 4037 or book a free consultation.
