Five Banking Scams To Watch Out For In 2023
The soaring cost of living will continue to provide an opportunity for criminals in 2023, with people more likely to try a ‘get-rich-quick’ scheme, take a punt on a risky investment, or plump for a supposed bargain from an unknown seller.
Don’t risk unwittingly putting your money straight into the hands of a fraudster. Here is the Which? Money rundown of five banking scams to watch out for in the coming year - and how to avoid them.
1. Money mule requests
Never let someone move money through your bank account in return for a fee. Criminal gangs try to recruit ‘money mules’ to launder stolen money using legitimate bank accounts.
They usually target younger people via social media posts, fake job advertisements and targeted emails. However, Lloyds Bank recently reported a sharp increase in the number of money mules aged over 40.
UK Finance said there was a significant increase in online user-generated posts encouraging people to become money mules in the first half of 2022.
These may be presented as easy investment opportunities or ‘jobs’ promising quick and effortless cash. Tactics include sending you funds ‘in error’ that you’re asked to return to a different bank account, asking you to apply for credit or bank cards on behalf of someone else, or convincing you to move money sent to your account (taking a cut for yourself) as a ‘favour’.
Victims of romance fraud are at particular risk of becoming unwitting accomplices to money laundering, as the perpetrators will often convince them to send money overseas or via cryptocurrency, making it difficult to trace. A Which? survey in 2022 found that one in five fraud victims send money to criminals via cryptocurrency.
Money mules may have no idea they’ve committed a criminal offence, but there's a maximum sentence of 14 years in prison for the worst offenders.
- Stay safe: If someone approaches you about moving money via your account, or you suspect someone is recruiting others to do this, report it to local police on 101 (or 999 in an emergency) or Crimestoppers on 0800 555 111. Find advice at moneymules.co.uk.
2. Card theft and ‘shoulder surfing
Fraud is increasingly committed online, but ‘offline’ crimes such as card identity theft and retail fraud in shops haven't gone away - far from it.
Losses to face-to-face card fraud in shops - including contactless fraud - reached £33.6m in the first half of 2022, up 72%. Banks say this typically involves low-tech methods such as entrapment devices and Pin pad cameras at ATMs, or ‘shoulder surfing’ (spying on you while you enter your Pin).
Over the same period, credit and debit card ID theft cases more than doubled, with losses spiking by 86% to reach £21.4m. Here, criminals use stolen or forged documents to apply for a card in your name, or take over an existing card account.
Data breaches can put your personal and financial data at high risk of card ID fraud. These tend to be outside the financial sector, although Revolut was hit by a cyberattack that exposed the data of over 50,000 customers in September 2022.
- Stay safe: Keep a close eye on your financial accounts (most banks offer free balance and payment text or email alerts) and personal credit report, flagging anything unusual immediately. Use ATMs inside a bank branch if possible, as these are less likely to have been tampered with.
3. Fake apps that target your bank account
At the start of 2022, researchers at mobile security firm Pradeo discovered a fake app called ‘2FA Authenticator’ on Google Play, which was downloaded more than 10,000 times before it was removed.
This dangerous app appeared to be entirely legitimate, as it provided a real service, but in the background, it disabled system security checks on victims’ devices and secretly installed malware that stole their banking login data.
- Stay safe: Official stores such as Apple’s App Store or the Google Play Store are still the safest place to find your apps - never click an unsolicited link from an advert, email or text - but malicious apps still slip through the net so always look at reviews for a particular app as well as the developer who made it. You should also check 'app permissions' (app stores provide lists of all the functions an app can access on your phone before you install it).
4. Calls and texts from ‘your bank’
Don’t be fooled by messages claiming to be from your bank or credit card company.
In some cases, they spoof the caller ID so that it appears to match the bank’s genuine phone number. Others make automated ‘robocalls’ that deliver pre-recorded messages inviting you to press a number on the keypad to speak to them about a spurious problem, such as a suspicious payment on your account.
Scammers will often have some personal details about you already, to make the scam even more convincing. Earlier this year we reported on a wave of bank impersonation scams that follow fake delivery texts.
We also see many examples of fake bank texts that try to get you to follow a link to a fake website or phone a fake helpline that puts you straight through to fraudsters, such as this fake HSBC text, which asked victims to call a phoney HSBC fraud helpline.
The end game is to convince you to hand over sensitive data; move money to a supposedly ‘safe account’ that the fraudster controls; or grant access to your device using remote access or screen-sharing software.
- Stay safe: Ignore any links included in texts and never trust Caller ID. If you have any doubts about the authenticity of a message, contact your bank or card issuer using a trusted method such as their mobile app or office phone number (check official statements or the number printed on the back of your card).
5. Online purchase scams
If you’re tempted to buy from a website you’ve never heard of to save money, or grab a second-hand bargain online, learn the warning signs of a purchasing scam first.
Scammers will pay for fake or misleading adverts on search engines and social media, or set up fake websites, typically offering low prices for high-value goods such as mobile phones, laptops, designer clothes and gaming consoles.
Be extra cautious if you are asked to pay via bank transfer (Faster Payment), as this offers far less protection than paying by credit or debit card. Steer clear of sellers asking for payment using PayPal’s 'Friends and Family option too, as you won't be covered by PayPal Buyer Protection if something goes wrong.
When you're waiting for something to be delivered, watch out for fake texts and emails claiming you need to reschedule delivery, which often links to convincing clone websites to harvest your personal data and card details.
- Stay safe: Stick to trusted retailers if you can, and pay by card. If you’ve never used the website or seller before, search for feedback from other customers, remembering how to spot a fake review with our top tips. You can also use GetSafeOnline's tool to check if a website has been flagged as malicious.
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