The Financial Conduct Authority published the findings of a multi-firm review of how UK Payment Service Providers detect and prevent romance fraud and support customers who have been deceived into sending money to criminals. The FCA found pockets of strong, victim-centred practice and effective transaction monitoring, but identified inconsistent victim support and recurring weaknesses in monitoring, investigation and frontline challenge that allowed losses to continue. The review covered six retail banks and payment firms and assessed 60 confirmed romance fraud cases, with losses ranging from GBP 100 to GBP 428,249. Romance fraud reports rose by 9% in financial year 2024/2025, with losses of over GBP 106m, and the City of London Police estimate an average victim loss of GBP 11,222. Most cases reviewed (85%) originated from online platforms, and fraud typically started with low-value payments that appeared consistent with normal spending patterns and were less likely to be flagged once a payee was treated as “trusted”. In nearly half of cases, victims did not disclose the true purpose of payments when questioned, and some cases involved victims moving funds via new accounts at other firms, which limited firms’ visibility and highlighted the potential value of structured cross-firm information sharing tools such as Cifas APP Victim Check. While some controls created effective “positive friction”, such as deferring higher-risk payments for manual intervention, the FCA observed missed detection opportunities including overseas transfers, multiple payments over short periods and sudden value increases, alongside gaps in payment analysis where methods beyond Faster Payments were not consistently captured. The FCA provided firm-specific feedback to the reviewed firms and expects all PSPs to consider the findings when assessing the adequacy of their own systems, controls, staff training and customer engagement and support, particularly for customers in vulnerable circumstances. It also noted that an independent review is evaluating the Payment Systems Regulator’s authorised push payment fraud reimbursement policy, including considerations around the Consumer Standard of Caution, across APP fraud typologies.
Financial Conduct Authority 2025-12-03
UK Financial Conduct Authority review of payment service providers highlights gaps in romance fraud detection and victim support
The Financial Conduct Authority (FCA) reviewed UK Payment Service Providers' handling of romance fraud, noting strong practices but inconsistent victim support and monitoring weaknesses. Covering six banks and payment firms, the review reported a 9% rise in romance fraud in 2024/2025, with losses over GBP 106 million. The FCA urged firms to improve systems, controls, and customer support, especially for vulnerable customers, and mentioned an independent review of the Payment Systems Regulator’s fraud reimbursement policy.