What Authorized Push Payment Fraud Is
Authorized push payment (APP) fraud is when a scammer tricks you into sending money to an account they control, and the bank treats it as a legitimate transfer because you authorized it yourself. The scammer impersonates someone you trust—your bank, your landlord, a government agency, a business you owe money to—and convinces you to move money via wire transfer, ACH, or real-time payment. You push the button. The money leaves your account. Then you realize the person on the other end was not who they said they were.
The critical difference between APP fraud and other payment scams is that you initiated the transfer. You were not hacked. Your account was not compromised. You made the payment yourself, based on false information. That distinction matters enormously because it determines whether your bank has to give the money back.
APP fraud is also called social engineering fraud or impersonation fraud because the scammer's weapon is not malware or stolen credentials—it is a convincing story and your trust.
Key Takeaways
- APP fraud happens when you authorize a payment to someone pretending to be a person or organization you trust, and the money goes to a scammer's account instead.
- Banks are not required to refund authorized push payments under U.S. law, even if you were deceived, because you initiated the transfer yourself.
- Common APP scams involve impersonation of your bank, landlord, tax authority, utility company, or someone claiming an emergency in your family.
- The fastest way to recover money is to contact your bank within hours of realizing the fraud and ask them to recall the payment or freeze the receiving account.
- Some banks voluntarily reimburse APP fraud victims, but reimbursement is not may provide and depends on the bank's policy and how quickly you report it.
Why Banks Do Not Have to Refund APP Fraud
Under the Electronic Funds Transfer Act (EFTA) and Regulation E, your bank is required to refund unauthorized transfers—meaning transfers made without your permission or knowledge. But APP fraud is different: you authorized the transfer. You typed the amount, confirmed the recipient, and sent the money. From the bank's technical standpoint, the transaction is valid.
Because you initiated the payment, the bank's legal obligation to refund it is much weaker than it would be for a hacked account or a stolen card. The law assumes that if you authorized a push payment, you knew what you were doing and who you were sending it to. The scammer's deception is a civil matter between you and them, not a banking error the bank must fix.
This is why APP fraud is so dangerous: the legal protection that covers other types of fraud does not apply. You are relying on your bank's goodwill and internal policies, not on your legal rights.
Common APP Fraud Scenarios
Bank impersonation: A scammer calls or texts claiming to be your bank's fraud department. They say suspicious activity was detected on your account and ask you to "verify" by transferring money to a "secure account" or paying a fee to unlock your account. They may even spoof the bank's real phone number so it appears legitimate on your caller ID.
Landlord or property manager impersonation: You receive an email that looks like it came from your landlord asking you to send rent to a new account due to a banking change. The email address is slightly off, or the scammer hacked the landlord's actual email. You send the money and later learn the landlord never changed accounts.
Tax authority impersonation: A caller claims to be from the IRS or your state tax agency and says you owe back taxes. They demand immediate payment via wire transfer or prepaid card to avoid legal action. The IRS does not initiate contact by phone for unpaid taxes, but the threat of arrest is effective.
Utility or service provider impersonation: You get a call or email from someone claiming to represent your electric company, internet provider, or insurance company. They say your account is overdue and will be shut off unless you pay immediately through a wire transfer or gift card.
Emergency scam: Someone calls claiming to be a family member, friend, or lawyer and says a relative has been arrested, is in an accident, or needs money urgently. They ask you to wire bail money, medical costs, or legal fees immediately and not to tell anyone.
How to Spot an APP Fraud Attempt
Real banks, government agencies, and utility companies do not ask you to prove your identity or pay bills by wire transfer, ACH, or gift card. Those payment methods are irreversible. If someone is pressuring you to use them, it is a scam.
Watch for these warning signs: unsolicited contact asking for immediate payment; a request to use wire transfer, ACH, prepaid card, or cryptocurrency; a threat of arrest, account closure, or legal action if you do not pay now; a story designed to create panic or urgency; a request to keep the payment secret; a phone number or email address that is slightly different from the official one; or a message asking you to click a link and log into your account.
If you are unsure, hang up and call the organization directly using a phone number from their official website or your billing statement. Do not use a number the caller gave you. Do not click links in unsolicited emails or texts. Real emergencies can wait five minutes while you verify.
What to Do Immediately After APP Fraud
Time is critical. The faster you report the fraud, the better your chances of recovery. Contact your bank by phone as soon as you realize the money was sent to a scammer. Do not wait for business hours if it is after hours—many banks have 24-hour fraud lines.
Tell the bank the payment was fraudulent and ask them to attempt a recall or reversal. If the receiving bank has not yet released the funds, they may be able to freeze or return the money. This works best if you report within hours, not days. Some banks can also contact the receiving bank and ask them to hold the funds pending investigation.
Ask the bank whether they will refund the money under their fraud policy. Some banks voluntarily reimburse APP fraud victims, especially if you reported it quickly. Others do not. Get the bank's answer in writing, including the reason if they deny reimbursement.
File a report with the Federal Trade Commission (FTC) at reportfraud.ftc.gov. This creates an official record and helps law enforcement track fraud patterns. If the scam involved impersonation of a government agency, also file a report with that agency directly (IRS, Social Security Administration, FBI, etc.).
Recovery Options and Realistic Outcomes
Recovery depends on how quickly you reported the fraud and whether the receiving bank cooperates. If you report within hours and the money has not been withdrawn, the receiving bank may freeze the account and return the funds. This is the best-case scenario and happens in a minority of cases.
If the money has already been withdrawn or transferred onward, recovery becomes much harder. The receiving account is often controlled by money mules—people who received the funds and immediately moved them to another account or cashed them out. Tracing the money across multiple accounts and banks is time-consuming and often unsuccessful.
Some banks have voluntarily committed to reimbursing APP fraud victims under certain conditions. Citibank, for example, reimburses customers who report fraud within a specific timeframe and meet other criteria. Chase, Bank of America, and Wells Fargo have similar policies, though the terms vary. Check your bank's fraud policy or ask during your initial report.
If your bank refuses to refund the money, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov/complaint. The CFPB cannot force the bank to refund you, but complaints are tracked and may influence future regulatory action.
How to Protect Yourself from APP Fraud
Never initiate a payment based on an unsolicited phone call, email, or text, even if the sender appears to be from a trusted organization. If someone contacts you asking for payment, hang up or delete the message and call the organization directly using a number you know is real.
Use strong, unique passwords for your bank and email accounts. Enable multi-factor authentication (usually a code sent to your phone) on all financial accounts. This protects you from account takeover, which is different from APP fraud but often precedes it.
Be skeptical of urgency and threats. Real organizations give you time to pay. Scammers create panic to bypass your judgment. If someone says you must pay right now or face arrest, it is a scam.
Consider setting up transaction limits or alerts with your bank. Some banks allow you to set a daily maximum for wire transfers or ACH payments, or to require a phone call before processing large transfers. This adds a friction point that can stop a fraudulent payment.
If you have elderly relatives or family members vulnerable to scams, talk to them about these tactics. Scammers specifically target older adults because they are more likely to trust authority figures and less likely to question unusual requests.
Frequently Asked Questions
Can my bank force the receiving bank to return the money?
Not directly, but your bank can ask the receiving bank to freeze the account and investigate. If the receiving bank determines the account is being used for fraud, they may return the funds. This works best if you report within hours. After a few days, the money is usually gone.
What if the scammer used a fake name or account?
Banks are required to verify customer identity when opening accounts, but scammers use stolen identities or money mule accounts. Law enforcement can subpoena bank records to trace the account, but this is slow and often unsuccessful because the money has already been moved.
Is APP fraud covered by my bank's fraud protection?
It depends on your bank's policy. Some banks voluntarily reimburse APP fraud victims, especially if you report within 24 hours. Others do not. Your bank is not legally required to refund authorized payments, so reimbursement is a courtesy, not a may provide. Ask your bank directly.
Can I dispute an APP fraud payment like I would a credit card charge?
No. Credit card disputes (chargebacks) are available for unauthorized charges, but APP fraud involves a payment you authorized yourself. Wire transfers and ACH payments do not have the same dispute process. Your only option is to ask your bank to recall the payment or refund it under their fraud policy.
What should I do if I gave the scammer my bank account number or login information?
Contact your bank immediately and change your password. Ask the bank to monitor your account for unauthorized activity. If the scammer has your login credentials, they may try to transfer money or change your account settings. Enable multi-factor authentication if you have not already.