By Kate Brown
Victims are being targeted by fraudsters to transfer large sums of money to what they think to be a legitimate business. These events are typically occurring when people are already in the process of transferring money for example during housing transactions or paying invoices. Fraudsters have been intercepting emails and direct mail in order to pose as the legitimate business and send a payment demand.
Figures provided by the banking trade body, UK Finance, calculate a total loss of £236m for victims believing they are sending money to an official body. Over the last year, 43,875 payment scams were reported. Statistics show that 88% of these figures were consumers who lost an average of nearly £3,000 per case. 12% of these figures were businesses who lost on average £24,255 per case. Money expert from consumer group Which?, Gareth Shaw, said: ”these figures show the alarming scale of push payment scams, with people still losing life-changing sums of money to this type of crime”.
Banks are unable to return almost three quarters of the money lost (74%), with figures showing financial providers only returning £60.6m of payment scam losses in 2017. Which? called for banks to take more responsibility when victims are conned into transferring money via bank transfer. This prompted Payment Systems Regulator (PSR) to enforce an action plan which will allow for better consumer and business protection. Managing director of economic crime at UK finance, Katy Worobec, stated the industry was “committed to playing its part” in combating the fraudsters.
UK Finance offers the following advice for consumers and businesses on how to protect against payment fraud:
- Don’t assume emails/texts/phone calls to be authentic
- Never disclose any security details such as a full banking password or PIN number
- Listen to your instincts – if you feel something isn’t right seek further information and hold off on proceeding
- Don’t be rushed into transferring money because a genuine organisation won’t mind waiting
- Stay in control – don’t panic and make a decision you will later regret