“Sophisticated” bank transfer scams on the rise

Moore Thompson are warning clients to be on the lookout for bank transfer scams, after a far-reaching study carried out by consumer magazine Which? revealed that people in the UK have collectively lost £5.5million as a result of such “sophisticated scams”.

According to the magazine’s research, an increasing number of Britons are falling victim to bank transfer scams. In many cases, a fraudster will trick a victim into sending money to a scammer-owned bank account, usually by ‘hijacking’ email correspondence.

Which? says that the average scam will cost a victim anywhere up to £1,200. However, the largest single loss reported to the magazine chimed in at a staggering £395,802.

One woman who lost £7,000 told Which?: “My son needed to pay a builder £7,000 for work to be done on his home. They had been communicating through email. The builder gave him his bank details, but then my son got an email saying that the business account was a different account number.

“This email was a scam, but as my son trusted the builder, he put the money into the different account, which had the same name. That was the last he saw of the £7,000, and obviously the builder did not go ahead with the work, as he had received no money.”

Payment methods such as credit or debit cards typically allow victims of such scams to claim lost money back from their bank, but fraudsters appear to have caught onto the fact that direct bank transfers do not offer this protection.

Earlier this year, the consumer magazine used its legal powers to issue a formal complaint to the Financial Conduct Authority (FCA) and the Payment Systems Regulator.

Managing Director of Which? Legal Services, Alex Neil, warned that the scams were growing “incredibly sophisticated” and that in many cases “consumers could not be expected to spot they were the target of fraudulent activity”.

He said: “The harsh reality is if you’re conned into making a payment to a fraudster via bank transfer, you often stand to lose large sums of money”.

Moore Thompson are advising clients to follow FCA guidelines whenever dealing with bank transfers, and to always clarify information either in person or over the phone with recipients before making payments for any goods or services.

The 5 January 2017 meeting of the Spalding Business Club will include a presentation about Cyber Crime by a representative of the East Midlands Cyber Crime Unit. The club meets at 7:00am on the first Thursday of every month at the current location of Bookmark Spalding.