Bank frauds and scams to avoid – how to reduce the risks of being a fraud victim

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Fraudsters are getting ever more sophisticated when it comes to trying to get us to part with our financial details and/or money. Here are five bank frauds and scams to avoid – don’t fall for them!

1. Fraudulent banking letter

This was recently highlighted by the Telegraph newspaper. Here a very convincing letter was sent to two Lloyds bank customers saying that there had been suspicious activity. The letter asked the recipients to call a number to verify that transactions were genuine. And here’s where it gets clever.

If you ring the number, you have to listen to a genuine sounding recorded message. Then you’re asked to enter your date of birth, account number and sort code (or card number). Next you’re asked to enter two digits from your PIN. At this point, the call centre tells you there’s been a problem so can you enter the other two digits. The Telegraph tried to ring the call centre to test the questions.

Lloyds Bank won’t say on record that this letter is not genuine (I have no idea why). But my understanding is that it is a fake.

SAVVY TIP: Watch out if you receive a letter like this from your bank. But it can be confusing. A friend of mine’s son recently received a letter from his bank where he was asked to ring the bank manager on his mobile number. I immediately thought it was a scam, but when he rang the bank (on the genuine contact number, not the one in the letter) they seemed to think the letter was genuine.

2. Spoof anti-virus software email

This is quite a new scam which has been highlighted by the anti virus software provider Symantec. When you first register to bank online, some banks recommend that you download anti-virus software called ‘Rapport’. This is genuine software that’s designed to help keep you safe when you bank online.

What the fraudsters have been doing is sending phishing emails that look like they come from an @hsbc.com address, telling the recipient to download the Rapport software by clicking on a link in the email. What makes this scam so convincing is that Rapport is the software used by several banks – so if you Googled it – you’d probably feel quite reassured.

But in fact, if you download it from the email, you’re actually installing an information stealing Trojan. Not only that, but according to SC Media, which reported the story, the malware creates a folder for itself and then hides in the folder so you can’t find it to remove it.

SAVVY TIP: Don’t download software via an email link sent by your bank, even if the email looks genuine. If you have downloaded it, let your bank know.

3. Call recording fraud

This involves a fraudster contacting someone, and pretending to be from their bank. The contact can take the form of an email, text or letter.

The victim is asked to contact the bank on a number that’s included in the message. Once the victim calls the number, the fraudsters redirect them to the bank’s genuine number, but they also record the call and steal the victim’s personal and financial ID information.

The fraudster then rings the bank and uses the customer’s details to steal money from their account.

SAVVY TIP: The best advice is to only contact your bank on a number that you regularly use or one that’s on your bank statement. You can find out more about this type of call record fraud on the Action Fraud website.

3. Vishing fraud

Vishing is ‘voice phishing’ and it’s a tactic whereby a fraudster rings you and pretends that they’re a police officer or someone from your bank. You’re told that there’s been an attempted fraud on your account and you need to move the money to a ‘safe’ account. Of course, the safe account belongs to the fraudster.

If you authorise the transaction (moving money to the fraudster’s account), it’s quite possible that your bank won’t refund the money that’s been stolen. However, it’s not black and white. There are cases where banks have been aware of fraudsters targeting their customers with this type of scam and haven’t warned someone who’s gone to the branch to transfer money to the supposedly ‘safe’ account. In a number of cases like these, the Financial Ombudsman Service has made the bank refund money that’s been stolen.

SAVVY TIP: If your bank refuses to reimburse you for the money that’s been stolen, complain and, if you don’t get anywhere, complain to the Financial Ombudsman Service, which is free to use.

4. SIM swap fraud

This fraud was first highlighted by the consumer programme You and Yours on BBC Radio 4. It involves a fraudster blocking someone’s phone and taking control of their SIM.

The fraudster doesn’t need the victim’s online customer number or password if they use the bank’s mobile banking app as they are able to contact the bank and get new customer details. They can then set up a new payee and pay themselves.

SAVVY TIP: The two banks that were highlighted by BBC Radio 4’s You and Yours programme, RBS and NatWest, have said that they have tightened their online banking security as a result of the information they were given by the BBC. However, that’s not to say that it couldn’t happen at other banks. If you have money stolen, the bank should refund any money stolen unless they can show you have been grossly negligent.

5. Number spoofing fraud

Here the fraudster impersonates your bank’s telephone number when it calls or texts you. The fraudster can change the number that appears on your handset when you get an incoming call – to mimic your bank’s number.

Because you think you’re speaking to your bank, you’re more likely to hand over your personal details. Fraudsters can also send texts where they’ve spoofed the number, such as one-off codes to authorise a payment into a fraudulent account.

SAVVY TIP: Financial Fraud Action says that one of the clues that the call may be from a fraudster rather than from your bank is if the caller refers to the number that’s showing on your screen (to reinforce the fact it’s a genuine number). If it really was a genuine call, the caller would be unlikely to highlight the number. You can find information on Ofcom’s website about what to do to avoid being a victim of number spoofing.

Related articles: 

VIDEO: What to do if you’re a victim of ID fraud

5 steps to take if you’re a victim of ID theft or ID fraud

How to complain to the Financial Ombudsman Service

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