Here’s Banking on It

September 25, 2018 Longrider Consumer Matters, General News 21

Bank fraud is on the rise. So beware.

The banks are being heavily criticised because they don’t refund the victims. However… Read the case studies and ask would you fall for it? Seriously. Would you allow a complete stranger who has cold called you to have access to your money? Really?

Well, really people do. I’ve had the occasional text checking on a transaction asking for a simple Y or N to determine whether the transaction is genuine. They include the last four digits of the card number in the text. If I was in any doubt about authenticity, I have the bank’s phone number and would contact them directly. I would not call the number on the text unless it matched the one I have.

It strikes me that the people who have been scammed are remarkably naïve and trusting, as all of the calls they received would have set off alarm bells for me. Is it me? Am I just too cynical? Or are they naïve? I mean, we all know – or should by now – that banks don’t call you out of the blue and ask you to switch money from one account to another to protect it. Don’t we?

Criminal contacts the victim purporting to be from either the police or the victim’s bank and convinces the victim to make a payment. Often the fraudster will claim there has been fraud on the victim’s account and they need to transfer the money to a ‘safe account’ to protect their funds. However, the criminal controls the recipient account. Criminals may also pose as the police and ask the individual to take part in an undercover operation to investigate ‘fraudulent’ activity.

What would you do? Me, I’d hang up and call my bank direct.

Fraudsters also pose as organisations such as utility companies, telephone providers or government departments and claim the victim must settle a fictitious fine or to return an erroneous refund. The scams can often involve the criminal requesting remote access to the victim’s computer.

Again, I’d call the organisation directly using the numbers I already have to check. Given that these organisations don’t call you and ask for money over the phone anyway.

Victim attempts to pay an invoice to a legitimate payee, but the scammer intervenes to convince the victim to redirect the payment to the scammer’s account. Often involves email interceptions. Criminals often pose as conveyancing solicitors, builders and other tradesmen, claiming that the bank account details have changed.

Now this one can be a problem and does require vigilance. If I received such a request, I’d contact the person directly by phone and ask them to confirm before I went ahead. Certainly the change of bank details immediately before a payment was due would ring alarm bells. I would not just comply.

Victim pays in advance for goods or services that are never received. These scams usually involve an online platform such as an auction website or social media. Common scams include the apparent sale of a car or a technology product, such as a phone or computer, advertised at a low price to attract buyers. Criminals also advertise fake holiday rentals and concert tickets. While many online platforms offer secure payment options, the criminal persuades their victim to pay via a bank transfer instead.

Again, this one should alert you as soon as you see it and it plays to the victim’s greed.

Criminal convinces victim to pay a fee which would they claim would result in the release of a much larger payment or high value goods. However, no such payment exists. Typically, it is claimed that the victim has won an overseas lottery or that gold or jewellery is being held at customs and a fee must be paid to release the funds or goods.

Are people still falling for this one? Really?

Victim persuaded to move their money to a fictitious fund or to pay for a fake investment. High returns offered to entice their victim. Scams include gold, property, carbon credits, land or wine.

I had a number of cold calls on my mobile a few years back from a boiler room con. All you do is point out that you don’t invest with some stranger who has cold called you. Oh, and are they regulated by the financial standards authority? Bzzzzzzzzzz.

Victim persuaded to make several payments to a person they have [this should be not met – ed] met, often through dating websites and with whom they believe they are in a relationship. The ‘relationship’ is often developed over a long period and the individual is convinced to make multiple, generally smaller, payments.

If someone you have never met asks you for money, and you pay them, then you are asking for it. Sorry, that sounds harsh, but there are enough warnings about this and in central Africa, there is an industry creating fake profiles on dating sites to lure the unwary. Besides, if you actually believe the hard luck stories, then you are incredibly naïve. If something seems too good to b true, then usually, it is.

So, on balance, I find myself sympathising with the banks here. It must be appalling to be the victim of such a crime, but why should the bank be expected to absolve you of your own due diligence. In each of the cases cited, the victim authorised the transfer. What was the bank supposed to have done to stop it?

21 Comments

  1. Why should a bank be liable for the stupidity of some of their customers, especially when challenged by the bank they say it’s a legitimate transfer/payment?

    • One of the case studies was interesting – in that they accurately told the victim that her account was frozen. I’d like to understand a bit more about how that one was worked. However, the same caveat applies – check separately with your bank and banks never approach their customers in this manner.

  3. Several years ago someone topped up their phone 3 times with my card details, I noticed whilst online banking, I can only assume the card details came from rogue traders..I think it can happen to anyone!

    • Card cloning is something that it is difficult to prevent – never let it out of your sight helps, but the chips can be scanned.

      These scams rely on the victim answering a cold call and authorising a transfer on the directions of a complete stranger who just happened to call them out of the blue.

  4. “. If I received such a request, I’d contact the person directly by phone and ask them to confirm before I went ahead. ”

    Organisation with which I am familiar had this happen to them. Fraudsters were VERY VERY sophisticated in this case as they also had some means – we haven’t yet fathomed what – to intercept that outbound call.

  5. “What was the bank supposed to have done to stop it?”

    And on this note, I’ve seen the other side too: bank’s internal fraud detection system prevented a – regular, monthly – payment to none other than HMRC.

    HRMC then fines for late payment of PAYE and bank refuses to take responsibility. Bank got dropped, hard, at first available opportunity.

  6. A few years back I looked at my statement and saw I had apparently paid for a couple of journeys with something called ‘Uber’ (I assume Umlauts were too much effort?) and that in towns I haven’t visited nor am I ever likely to want to visit. So I rang my bank, who told me to ring U-missing dots-ber, who were quite helpful and refunded the monies asap but were unable, due to data protection laws, to give me any inkling on how this fraud had come to pass.
    I was left hoping that it had been my wastrel, mildly criminal, son although what he would be doing on the wrong side of the M25 I know not (“if you’re going to buy drugs then at least from people educated enough to know how to spell ‘heroin'”).

    As to ‘cons’ (as opposed to ‘fraud’ as above) the old adage ‘you can’t con an honest man’ is true…99% of the time.

    Now would h’anyone be interested in this ‘ere brexit I got goin’ cheap, alweady? Luuurvelly colours on it, one careful owner, needs an MOT mind….

  7. There used to be a website that featured really idiotic posts that had been lifted from Facebook. I used to find it funny and disturbing in equal measure. There was a post from a guy warning people of a scam that Involved a letter inviting people to send their bank card to India along with the enclosed form on which you had to fill in your pin number. His parting shot, after having his bank account cleaned out, was “How do these people sleep at night”. The first comment in response was “How do you manage to wipe your own arse?”

    • What makes you think that? There are people who fall for these scams and then we get the sob stories blaming the banks for letting it happen. I fail to see what the banks could have done differently.

  10. I’ve come across two people who have fallen for the ‘Nigerian Prince / UN Ambassador / Lawyer” scam. When I pointed out their folly, neither admitted that they should have been more careful.

    Some folk will just not learn. Why this should affect my bank dividends is beyond me.

  11. I once got a cold call from a boiler room outfit, trying the usual “once in a lifetime opportunity” / “we’re contacting only a handful of elite investors” / “but you’ll have to hurry” and a whole host of other enticements.
    I managed to keep him going for more than half an hour, letting him think he was reeling me in (and letting his phone bill mount). He finally twigged that he was the one being had and completely lost his rag – rather giving himself away in the process!

    • Right, so Hamilton Accies have a system that allows one person to move large sums of money without any oversight. This person did so despite the movements triggering RBS’ fraud alert. Once alerted by the bank, this person continued with the transfer at the behest of the scammer.

      Given that this type of scam is common knowledge as is the fact that banks do not contact customers by phone or other means asking them to disclose account details, what, precisely, do Hamilton Accies think that the bank should have done differently?

      This case as far as I can see has no legs.

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