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Authorized push payment fraud

Authorized push payment fraud definition

Authorized push payment (APP) fraud is when a victim is deceived into making an instant payment to the scammer's account. The immediate nature of these payments means that the victim has little to no time to recognize they've been scammed before the money is gone. Once transferred, the money is almost instantly available to fraudsters, complicating recovery efforts.

See also: scam, social engineering, wire transfer fraud

How authorized push payment fraud works

  1. 1.The scammer often poses as someone trustworthy, such as a bank official, service provider, or even a family member.
  2. 2.They create a false sense of urgency, convincing the victim to make a transfer quickly.
  3. 3.Believing the scammer, the victim authorizes their bank for a real-time payment directly to the scammer's account.
  4. 4.Once the funds are transferred, scammers withdraw or move them right away.

Examples of authorized push payment fraud

  • Bank alert. Emma receives a call from someone claiming to be from her bank's fraud team. They say suspicious activity was noticed on her account and advise her to move her funds to a “secure” account immediately. Thinking she is protecting her money, Emma transfers it, only to realize later it was a scam.
  • Rental scam. Jake finds an apartment rental online at an attractive price. The “landlord” asks for a deposit via a real-time payment for reservation. After transferring the money, Jake finds out the listing is fake and the “landlord” is unreachable.
  • Invoice scam. A small business receives what looks like a genuine invoice from a regular supplier with a note about a changed bank account. They make the payment using a real-time transfer, only to learn later the email was from a scammer who had mimicked the supplier's invoice.