Fraudsters fake security measures to access bank accounts

George Hay Chartered Accountants

Businesses and individuals are being encouraged to redouble their vigilance as fraudsters fake security measures to gain the information required to access and drain bank accounts of funds.

In one instance, an academic received a call that was purportedly from her bank saying that her account had been frozen owing to odd transfers being made. The call had begun with some preliminary security questions, which she had answered.

The caller said that they would call back once she had had an opportunity to examine her accounts. When she checked, her account had indeed been marked as ‘FROZEN’.

Upon receipt of the callback, she asked the caller to verify his identity, at which point he sent her a text message seemingly offering confirmation of his name and job title.

She was then told that she would need to set up a new account in order to protect her funds and was subsequently asked to transfer £20,000 to the account number and sort code provided by the caller, which she did.

It was only after communicating with her bank the next day that it became clear that she had been the target of fraud.

Further investigations revealed that it had been her responses to the security questions, asked as part of the original call, that had given the perpetrators adequate information to then gain access to the account and change the name to ‘FROZEN’.

Because the resulting transfer of funds had been made by the account holder herself, the bank would not provide compensation for the losses incurred.

RBS, the bank involved, said: “The bank provides clear guidance on these scams. Customers should never make a payment at the request of someone, over the phone, purporting to be from their bank.”

“RBS would never ask customers to move money to keep it safe from fraud.”

In 2017, UK bank customers surrendered more than £236m in so-called “authorised push-payment scams” where individuals are duped into transferring money to a fraudster’s account.

The Payment Systems Regulator (PSR), – which oversees the UK payment industry – has announced measures to help banks stop or else pursue cases of fraud.

Stumbling blocks associated with the sharing of pertinent information between financial providers will be done away with and heightened security checks will make it more difficult to open, or take possession of, accounts to receive stolen funds.

Banks will also have to check that the payee name entered by a customer matches that on the recipient account or else face accountability for any losses.

From September, banks which have not taken satisfactory steps to prevent or identify fraud may be required to reimburse victims, provided that the victim was not unreasonably careless with their security information.

Martin Williams, Partner at George Hay, said; “Businesses and individuals should be vigilant to suspicious communications at all times, as falling foul to any one of these operations could have disastrous consequences.”

“If you’re unsure about any communications you receive relating to your accounts, finances or tax affairs, we would urge you to contact your usual adviser in the first instance.”

To speak with one of our experts, contact us today.

Link: Uncovered: cruel scam so slick even the vigilant can be duped