A voluntary code for banks to follow has just been proposed, which could give people more help in getting their money back. However, victims may still find themselves out of pocket – so it’s always best, if at all possible, to avoid falling for a fraud in the first place.
Here are some of the warning signs to spot, highlighted by trade association UK Finance.
The victim pays up-front for goods or services that are never received. These scams often happen online, such as when someone uses an auction website or social media. A warning sign could be if you spot something of high value, such as a car, phone or computer, advertised at a low price. Fake holiday rentals and concert tickets may also be advertised online. Victims may be persuaded by the fraudster to pay for the goods via direct bank transfer, instead of using websites’ secure payment options.
Advance fee scam
With this scam, victims may be tricked into parting with their money as a ‘fee’ after being promised a larger reward. Criminals may claim they have won an overseas lottery, or that gold or jewellery is being held at customs – and a fee must be paid to release money or goods which don’t exist.
People are persuaded to move their money into a fictitious fund, or to pay for a fake investment. The criminal usually offers high returns to entice them. These scams include investment in items such as gold, property, land banks and wine.
The victim is convinced to make a payment to a person they have met, often through social media or dating websites, and with whom they believe they are in a relationship. The ‘relationship’ is often developed over a long period and the person is convinced to make multiple payments to the criminal.
Invoice and mandate scam
Scammers step into the middle of people’s legitimate transactions to swipe money that was intended for someone else. Someone could be paying a solicitor or a builder, for example, but the criminal intervenes and convinces the victim to redirect the payment into their account instead. The criminal may persuade their victim that the bank details of the person they intended to pay have changed.
Someone pretends to be from the police or the victim’s bank, to convince them to make a payment. Often, they will claim there has been a fraud on the victim’s account and they need to transfer the money to a ‘safe account’ to protect their funds. However, the criminal actually controls the recipient account.
Pretending to be from a legitimate company
Fraudsters pose as organisations such as utility companies, communications service providers or government departments, and claim that the victim must to 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.