These scams have cost bank customers £500 million in six months – here’s how not to be a victim

These scams have cost bank customers £500 million in six months – here’s how not to be a victim
More than £500 million stolen from customers of British banks by scammers in the first half of 2018 (Photo: Shutterstock)

Customers of British banks have had more than £500 million stolen by scammers in the first half of 2018, new figures have shown.

The report from UK Finance, which tracks data on bank transfer fraud, revealed that £145.4 million of this was lost due to ‘authorised push payment’, or ‘APP’ scams, which con people into transferring money to another account.

The remaining £358 million was lost to unauthorised fraud, where transactions are made by a third party without the account holder’s knowledge.

What are APP scams?

Purchase scams were the most common form of APP scam reported from January to June (accounting for 63 per cent), in which victims are duped into paying for goods or services that do not exist.

These scams often take place online through auction websites or social media, with common dupes including adverts for fake holiday rentals or concert tickets.

Fraudsters will persuade their victim to pay via a bank transfer instead of a secure payment option.

What are the rules around refunds?

While victims of unauthorised fraud will, in most cases, receive a full refund, those duped by APP scams currently have no legal protection to cover them for financial losses.

This is because legislation in place at the moment makes the account holder liable for any losses incurred if they authorise a payment themselves.

Of the £145 million lost through APP scams, £30.9 million has been returned to customers.

Scams which dupe victims into paying for goods or services that do not exist were the most common type of scam in the first six months of this year (Photo: Shutterstock)
Scams which dupe victims into paying for goods or services that do not exist were the most common type of scam in the first six months of this year (Photo: Shutterstock)

UK Finance said: “Banks abide by the existing laws, which clearly set out the requirements regarding refunds for authorised and unauthorised payments.

“The law is clear that when a customer has authorised a payment, even if they are tricked into doing so, current legislation means that they have no legal protection to cover themselves for losses – unlike for an unauthorised transaction.

“Banks will always make every effort to help a customer recover any funds stolen through authorised push payment scams and will provide compensation to customers on a case by case basis.”

How to protect yourself from fraud

To stay safe from purchase fraud scams, UK Finance advise taking time to research retailers before providing any of your details and to be suspicious of ‘too good to be true’ online offers.

Customers are urged to only use retailers they trust, and to take the time to install the built-in security measures which most browsers and banks offer.

They also advised taking the following precautions to protect against internet banking fraud:

  • Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by. A genuine bank or organisation will never contact you out of the blue to ask for your PIN or full password.
  • Always question uninvited approaches in case it’s a scam – instead, contact the company directly using a know email or phone number.
  • Don’t be tricked into giving a fraudster access to your personal or financial details – never automatically click on a link in an unexpected email or text.
  • Ensure you have the most up-to-date security software installed on your computer, including anti-virus – some banks offer free security software, so check your bank’s website for details.