Jeff Salway: Current accounts are fraudsters' favourites

Current accounts are fraudsters' favourite targets. Picture: John DevlinCurrent accounts are fraudsters' favourite targets. Picture: John Devlin
Current accounts are fraudsters' favourite targets. Picture: John Devlin
FAKE applications allow scammers to run up huge overdrafts says Jeff Salway

Bank customers are increasingly being targeted by fraudsters using current accounts to run up large overdrafts and open other products in the victim’s name.

Current accounts have become the financial product of choice for fraudsters, with the number of fake applications for current accounts doubling last year.

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New figures from Experian show that 156 in every 10,000 current account applications in December were fraudulent, up from 73 in every 10,000 at the start of 2015.

The appeal of current accounts to fraudsters is due largely to its dual purpose in being able to use the victim’s overdraft facilities and then also use their identity to open other products, including credit cards and loans.

Those products can then be used to rack up further debts in the victim’s name, said Nick Mothershaw, director of identity and fraud at Experian.

“Current account fraud really came to the fore in 2015, with identity thieves acting as the chief culprits. The positive side is that these numbers represent detected and prevented fraud attempts, demonstrating the robustness of the protection systems in place for financial products,” he said.

“While it is clear that the systems are working, both companies and consumers need to remain vigilant to the evolving tactics of fraudsters which become more sophisticated with each passing day.”

The agency also reported sharp increases in both insurance policy fraud and credit card fraud, with the latter, like current account attacks, driven primarily by identity theft.

A more recent development is a spike in so-called “smishing” attacks, in which some victims have lost tens of thousands of pounds. This is where fraudsters trick people into downloading a virus that enables them to pose as their bank in text messages. They then use that access to secure passwords and security information. Personal and business bank customers are being targeted by phone-based scams too. One of Scotland’s biggest companies, which can’t be named for legal reasons, was recently scammed out of £18 million after fraudsters impersonated its chief executive and conned a finance employee into transferring the money into a foreign bank account.

Police Scotland said the targets of such fraud were typically Scottish subsidiaries of international businesses while individual bank customers have also been targeted.

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The rapid evolution of fraud focusing on financial products and services poses a challenge for the authorities. A new Joint Fraud Taskforce, which launched on Wednesday, is designed to improve the co-ordination of different agencies trying to tackle the issue.

The Taskforce, with members including Financial Fraud Action UK, the City of London Police, the Bank of England and the UK’s main banks, is to issue a list of the most wanted fraudsters, identify weak spots in computer defences and make it easier for victims to claim refunds.

The British Bankers’ Association (BBA) said it was launching a new financial crime alerts service that would see banks and law enforcement agencies share real-time intelligence on financial crime.

“Tackling fraud is a top priority for the industry. Customers and businesses rightly expect high levels of security whether they bank online or in person,” said a spokesperson for the BBA. “Fraudsters are constantly adopting new tactics so it is critical that we join forces to stop them ripping off individuals and businesses.”


• Always shred or destroy documents that contain personal information before throwing them away.

• Never respond to cold phone calls or e-mails asking for account details, PINs, passwords or personal information.

• Don’t give too much away on networking websites. For example, pets’ names or children’s names could be used as passwords.

• Register to vote at your current address. If you don’t, thieves could use your previous address details to open new credit accounts, and run up debts in your name.

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• Monitor your post regularly so you know when to expect important documents — and when to act if they don’t arrive.

• Redirect your mail via the Post Office if you move house.

• Always use secure, unique passwords for as many online accounts as possible, and ideally all of them. At the least have a unique password for each type of service provider such as financial services, retail services and e-mail.

• Don’t store account names and passwords on your smartphone, either in email, as a note, or to ‘autocomplete’ when you open a website or app. It will be a goldmine for fraudsters if your device is lost or stolen.

Source: Experian