How UK Banks Started Blocking Marketplace Fraud

1 — Why did UK banks shift from monitoring to blocking in 2025?

The answer is regulatory economics. Before October 2024, UK banks lost nothing when a customer was defrauded into making a bank transfer — the loss sat entirely with the victim. After the PSR’s mandatory APP reimbursement rules, the sending bank became liable for 50% of every successful fraud claim up to £85,000. Overnight, marketplace fraud became a bank balance-sheet problem.

The arithmetic is straightforward: if £160,000 is stolen on Facebook Marketplace every day in the UK (TSB), and banks are now liable for 50% of eligible APP claims, then the theoretical daily exposure for the sending bank population is up to £80,000 — before accounting for the consumer-standard-of-caution exception that reduces some claims.

TSB had been the most vocal UK retail bank on marketplace fraud for years — publishing daily loss figures, lobbying Meta, and giving evidence to parliamentary committees. By 2025, Santander became the first bank to publish specific blocking numbers, revealing a meaningful operational shift from reactive fraud investigation to proactive payment intervention.

1,800+ Santander customers protected from Facebook Marketplace fraud in 2025

Santander’s automated payment-screening system blocked or challenged Faster Payments to suspected Facebook Marketplace sellers, protecting more than 1,800 customers from probable fraud losses in a single year. Source: Santander UK(Santander UK, 2025)

£160,000 stolen on Facebook Marketplace every day in the UK

TSB’s published daily loss figure — the most widely cited UK marketplace fraud statistic in national press and parliamentary evidence since 2024. Source: TSB(TSB, 2025)

2 — The PSR’s October 2024 rules: the financial mechanism behind blocking

The Payment Systems Regulator’s APP reimbursement framework, effective 7 October 2024, fundamentally changed the economics of marketplace fraud for UK banks. The 50:50 liability split between sending and receiving PSPs is the single biggest driver of the blocking behaviour observed at Santander and expected to spread across the UK banking sector.

How the 50:50 split works in practice

When a UK consumer is defrauded into making a Faster Payment to a marketplace scammer, and successfully claims APP reimbursement:

• The sending PSP (the victim’s bank) pays 50% of the reimbursement value.
• The receiving PSP (the fraudster’s bank, or the “money mule” bank) pays the other 50%.
• Both PSPs can pursue the fraudster for recovery — but in practice, fraud proceeds are rarely recovered.
• The maximum reimbursement is £85,000 per claim — meaning both banks face up to £42,500 per successful APP claim.

For a UK retail bank processing tens of thousands of marketplace payments per month, this liability structure makes investment in fraud-prevention technology (automated blocking, risk-score algorithms, real-time friction) economically rational at scales that were previously hard to justify purely on customer-welfare grounds.

£85,000 per-claim APP reimbursement cap, split 50:50 between sending and receiving PSP

The PSR’s mandatory APP reimbursement rules create a direct financial liability for UK sending banks — up to £42,500 per successful claim — for Faster Payments sent to APP fraudsters. Source: Payment Systems Regulator(PSR, 7 October 2024)

Consumer standard-of-caution exception lets banks reduce or deny claims

Banks may reduce reimbursement where the consumer ignored a specific direct warning or failed to take steps a reasonable person would take — providing a further incentive to issue prominent in-journey warnings before a payment clears. Source: Payment Systems Regulator(PSR, 2024)

3 — TSB’s public-data strategy and what it achieved

TSB’s decision to publish the £160,000-per-day Facebook Marketplace loss figure was a deliberate regulatory-pressure tactic — and it worked. The figure is now cited by Parliament, the FCA, consumer organisations and national press, and has directly influenced Meta’s UK policy discussions on seller identity verification.

TSB’s fraud reporting is unusual in UK retail banking for its specificity and platform-level attribution. Rather than publishing aggregate fraud statistics, TSB identifies individual platforms by name and publishes daily-rate figures calculated from its own purchase-fraud caseload.

The bank’s position is unusual for a second reason: TSB’s customer base has historically skewed younger and more digitally active than the broader UK banking average, making it over-exposed to marketplace fraud relative to its market share. This concentration gives TSB both stronger loss data and a stronger commercial incentive to advocate for platform-side intervention.

TSB’s reported figures include:

• £160,000 stolen on Facebook Marketplace every day in the UK (2025).
• 73% of all TSB purchase-fraud cases trace back to Facebook Marketplace.
• The bank has called publicly for Meta to implement seller identity verification and has given evidence on the issue to parliamentary select committees.

4 — The FCA’s Consumer Duty and proactive fraud prevention

The FCA’s Consumer Duty, which came into force in July 2023 for open products and services, requires FCA-regulated firms to deliver good outcomes for retail customers. The FCA has explicitly applied this to fraud prevention — firms cannot simply rely on post-fraud reimbursement; they must take proactive steps to prevent foreseeable harm.

For UK retail banks, the Consumer Duty creates an obligation to:

• Identify customers who are likely to be in the process of making a fraudulent payment.
• Provide clear, specific warnings at the point of payment — not generic disclaimers buried in T&Cs.
• Offer friction that is proportionate to the fraud risk (e.g., delays, mandatory phone verification, or payment blocking for high-risk recipient patterns).
• Train frontline staff to recognise the indicators of marketplace-fraud calls in progress.

Santander’s 2025 blocking announcement is a direct expression of Consumer Duty compliance — the bank is demonstrating it has taken proactive, measurable steps to prevent customer harm, not merely processed transactions and offered retrospective reimbursement.

FCA Consumer Duty: firms must deliver good outcomes for retail customers (July 2023)

The FCA’s Consumer Duty came into force on 31 July 2023 for open products and services. It requires firms to take active steps to prevent foreseeable harm — including proactive fraud prevention measures, not solely retrospective reimbursement. Source: Financial Conduct Authority(FCA, July 2023)

5 — What bank-side marketplace fraud blocking looks like in practice

UK retail banks typically use a combination of real-time transaction scoring, device-fingerprint analysis, recipient-risk profiling, and in-journey friction to block suspected marketplace fraud. The Santander announcement describes a system that identifies high-risk payees and either blocks the payment entirely or forces the customer through a high-friction verification journey.

The signals that trigger a marketplace-fraud block

While banks do not publish their precise risk-scoring criteria (for obvious fraud-evasion reasons), the publicly available evidence from Santander, TSB and industry sources suggests blocking is triggered by combinations of:

• New payee account (first-time recipient) with no prior payment history.
• Payment amount consistent with common marketplace listing prices (£50–£5,000).
• Banking session initiated from a mobile device immediately after extended phone use (social-engineering indicator).
• Customer account activity inconsistent with normal behaviour (sudden large outbound payment).
• Recipient account on shared-intelligence lists (e.g., Cifas National Fraud Database mule accounts).
• Platform-specific recipient account patterns (accounts that frequently receive marketplace-size payments from many different senders).

6 — What this means for UK marketplace buyers and sellers in 2026

UK bank-side blocking is creating real friction for legitimate marketplace transactions as well as fraudulent ones. Buyers who pay via Faster Payments face an increasing probability of having legitimate payments delayed or blocked, particularly for transactions involving new payees and amounts consistent with marketplace listings.

The unintended consequence of bank-side blocking is a meaningful transaction failure rate for honest marketplace users — legitimate sellers who find that buyers’ bank transfers are blocked mid-pickup experience deal collapse, reputational damage and customer-service overhead.

The structural solution is payment methods that carry a verifiable trust signal — making it possible for banks to distinguish legitimate marketplace transactions from fraudulent ones before the payment clears. Escrow-based payments with biometric identity verification on both parties provide exactly this signal, because the payment infrastructure itself demonstrates that both parties have been verified and that funds are conditional on delivery.

Related research and guides

Research papers

• The UK Marketplace Fraud Index 2026
• PIN Pickup vs Bank Transfer: Why UK Marketplace Pickups Need Escrow
• Why 50,000 Vinted Bans Should Worry Every UK Reseller
• A Taxonomy of UK Marketplace Scam Patterns 2026
• UK Marketplace Fraud Statistics 2026 — Sourced Data

Guides

• Safe Payment for Marketplace Pickups — PIN Pickup
• Free UK Scam Checker — Safety Check
• Trust Passport — Portable Seller Reputation