UK consumers are being cautioned by Which? money watchdog experts as con artists continue to take advantage of the rising cost of living. The top five banking and payment scams to avoid in the new year have been disclosed.
With household finances being squeezed owing to inflation, skyrocketing energy bills, and rising food prices, the last thing anyone needs is to be duped. Sadly, though, it's a golden opportunity for heartless con artists, who profit from folks looking for a deal.
"Scammers are relentless when it comes to wanting our personal information and ultimately our money. And while their tactics will no doubt continue to evolve, we think these scams are the main ones to watch out for,” said Jenny Ross, Which? Money Editor.
“Banks will never ask you for personal information, nor will they try to hurry you into making a decision. If this happens to you - whether by text, email, or over the phone, step back and think about what they’re asking. If it looks too good to be true, it usually is."
Here are the five banking and payment scams that Brit consumers should look out for:
1. Requests for money mules
Intentionally or unintentionally allowing a criminal to use their bank account to transfer stolen funds is known as a "money mule request." These will frequently show up in targeted emails or social media posts. In its most recent fraud report, the banking industry association UK Finance noted a considerable rise in online user-generated posts inviting people to sign up to become money mules.
Money mule tactics include getting people to apply for credit or bank cards on someone else's behalf, sending money "in error" that they are then requested to return to a separate bank account, and persuading people to move money given to their account in exchange for a fee.
2. "Shoulder surfing" and credit card fraud
Although a sizable part of the fraud is committed online, customers must continue to be on the lookout for "offline" crimes like card theft and retail fraud.
According to data from UK Finance, losses from contactless and face-to-face card theft at retail stores totaled £33.6 million in the first half of this year, an increase of 72% over the same period last year. Fraudsters will "shoulder surf," which is when they watch victims as they input their PIN number or entrapment tools like PIN pad cameras at ATMs.
During the same time frame, incidents of credit and debit card ID theft more than doubled, with associated losses rising by 86% to a total of £21.4 million. In order to apply for a card in the victim's name or take over their existing account, scammers who steal cards will use the information to fake paperwork.
3. Malicious apps
Consumers are advised by experts to be on the lookout for any strange activity in their financial accounts and personal credit reports and to alert their banks right away. The majority of banks provide free text or email alerts for balance and payments. Use ATMs inside bank branches whenever possible as they are less likely to have been tampered with.
This additional layer of security is well-known to fraudsters. At the start of this year, Pradeo researchers at a mobile security company found a bogus app called "2FA Authenticator" on Google Play that had been downloaded more than 10,000 times before it was taken down. The virus known as "2FA Authenticator" stealthily installed on victims' devices disabled system security checks and collected their banking login information.
The safest sites to download apps continue to be official stores like Apple's App Store and Google Play Store, but caution is still advised. Read reviews of the app and the person who created it because they may provide information regarding its reliability. Never click an unsolicited link in an advertisement, email, or text message, and always look at the "app permissions" before downloading an item.
4. Fake impersonation
A classic fraud strategy involves imitating real businesses, notably banks, or "spoofing" them. A recent Which? investigation discovered that six major banks' phone numbers were susceptible to spoofing.
In order to speak with them about a problem, such as a suspicious payment, scammers conducted automated "robocalls" with pre-recorded phrases urging victims to hit digits on the keypad.
Criminal groups frequently have personal information about victims, which makes the fraud seem more legitimate.
Another technique used by con artists to get victims to click on websites that initially seem real is the use of fake texts. They seek access to the victim's personal information or money sent to a "secure account" under their control.
According to security experts, never rely on the Caller ID that appears when you receive a call. Also, keep in mind that banks will never request your personal information over the phone.
5. Online shopping fraud
Scammers primarily spend money on false or deceptive advertisements on search engines and social media, frequently promising reduced costs for pricey things like mobile phones or laptops.
According to UK Finance statistics, Authorized Push Payment fraud involving purchases was the most prevalent in the first half of 2022.
These can be challenging to identify because some scammers do an excellent job imitating well-known retailers' websites.
However, there are frequently some telltale indicators of fraudulent websites, such as grammatical problems in the "About Us" part or a missing or insufficient "Contact" page.
While it may be tempting to grab a deal, it is best to stick with reputable merchants. Bank transfer payments are less secure than credit card payments.