APP fraud: why the Crown Dependencies are stronger together
By Alan Ainsworth, Executive Director of Policy, Communications and Innovation, Jersey Financial Services Commission
Fraud does not respect borders. That is one reason the Crown Dependencies are working together on Authorised Push Payment fraud (APP).
APP fraud happens when someone is deceived or manipulated into authorising a payment to a criminal. These scams often use pressure, urgency or impersonation of a trusted person, business or organisation. They are designed to feel plausible at exactly the moment someone is being pushed to act quickly.
That makes APP fraud a particular challenge for modern financial services. We have spent years making payments faster and easier. That is generally a good thing. Customers expect it and businesses rely on it. But criminals benefit from speed too.
The recent FCA Mills Review has highlighted how technology is changing financial services and the risks that come with it. One of its conclusions is that innovation can improve outcomes, but it can also increase fraud and consumer harm if the right protections are not in place.
We do not need to look far for examples of that challenge. It is already playing out today through Authorised Push Payment fraud.
This is why the JFSC is working with financial regulators in Guernsey and the Isle of Man on a coordinated Crown Dependencies approach. We are aligned on the benefits of a practical framework that is broadly consistent across the islands, while recognising that each jurisdiction has its own context.
That collaboration matters. Many firms operate across more than one island. Customers should be able to expect clear and consistent treatment. And industry needs an approach that is workable, not three separate versions of the same answer.
The initial focus is deliberately targeted: retail banking customers making sterling payments through Faster Payments and CHAPS. That gives the work a clear starting point. Good regulation needs to be specific enough for firms to implement and practical enough to work in the real world.
There are difficult questions ahead. Reimbursement will need careful thought, including eligibility, possible caps, customer responsibility, vulnerability, and when reimbursement might be reduced or refused. These are not just technical points. They affect customer outcomes, firm behaviour and confidence in the system.
It’s important we also focus on stopping fraud from happening in the first place. That means prevention, detection, systems and controls, customer warnings, education, support for vulnerable customers, and clear expectations on firms when suspected fraud is reported.
For islanders, the message is simple: pause before paying. Question unexpected requests. Do not be rushed. If something feels unusual, contact your bank straight away.
For firms, APP fraud is more than a financial crime issue. It is a trust issue. Are warnings clear enough? Are controls working at the right moment? Do customers know what to do when something feels wrong? These are practical questions, but they matter.
APP fraud will continue to evolve. Our response has to evolve too.
The aim is not regulation for its own sake. It is a practical framework that helps firms respond well, supports better customer outcomes, and maintains confidence in financial services.
In small, connected jurisdictions, collaboration is not a nice to have. It is how we make regulation work.