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Bank Transfer Scams of 2021: Covid-19 & More

Apr 19, 2021

The COVID pandemic has seen many changes to our lives. And sadly, one of these is an uptick in the amount of cyber-crime which both business and individuals are experiencing. Whilst many types of cyber-crime have risen, bank transfer scams have been on the rise. Which? report victims lost as much as £479m to bank transfer fraud in 2020 – an increase of 5% on the year before. Most likely due to cyber criminals exploiting fears and anxieties over the COVID-19 pandemic.

Common bank transfer scams in 2021

Cyber criminals are continually updating their techniques and methods in order to trick people out of money. One method they are using is the bank transfer scam. Also known as an authorised push payment (APP), they occur when you transfer money from your own bank account to that of a scammer.

There are many techniques that cyber criminals use to scam people into transferring their money including:

Delivery scams

This typically involves communication from a delivery company who tried to deliver a parcel to you but couldn’t. Communication may come via text message or email but will usually ask the individual to click a link to find out more or rearrange delivery. This link will then take users to a webpage which attempts to gain your personal and financial details.

Whilst many delivery companies have been affected, one recent high-profile example of this involves Royal Mail. Bogus messages sent pretending to be from the company have seen people unwittingly provide their bank details and make bank transfers to scammers.

Impersonation scams

Impersonation scams typically involve fraudsters impersonating a genuine organisation. For example, a retailer, HMRC, your bank or increasingly the police. They may involve phone calls, emails or text messages which appear to come from a trusted organisation. The aim of which are to get you to reveal personal or financial details or get you to transfer money to a different bank account.

They are also becoming very sophisticated – using techniques such as number spoofing to make the number they are calling from appear to be that of the organisation they are impersonating. This can make it hard to spot when you are being contacted by a scammer.

Online dating scams

Also known as romance scams, fraudsters may set up fake profiles on online dating sites and apps. They will then look to convince those they engage with to send them money by appealing to their emotions. For example, they may state that they live outside the UK and need money to come and visit.

Bank transfer scams and businesses

Businesses are also at risk of falling victim to bank transfer scams. NatWest list one of the common bank transfer scam methods impacting businesses as a change of bank details scam.

This scam typically involves a fraudster posing as a contact from one of your business’s known suppliers, contractors etc. They may make initial contact with your business asking for an email address to send an invoice to. When they email the contact given, they will advise that they have changed the bank details which you have previously used to make regular payments to. But in reality, the bank details have been changed by the fraudster to a bogus account meaning you won’t be paying the person you think you are.

These types of scam can be highly sophisticated and hard to spot – details you may check such as the finance director’s details, and signature will most likely appear correct, and the email address used to send the invoice will be very closely matched to that of your genuine supplier.

Barclays also list this scam as a risk to businesses and sadly one that costs. Despite finding this type of scam to be the third most common, it accounted for the second highest value of loss, averaging over £7,300.

Barclays also list the following bank transfer scams as a risk to business:

  • Impersonation scams – these involve fraudsters impersonating organisations or authorities in order to gain banking information
  • Purchase scams – these involve fraudsters tricking businesses into purchasing non-existent products through a website that they believe to be genuine – such as PPE or office supplies

What to do if you are a victim of a bank transfer scam

If you are the victim of a bank transfer scam then get in contact with your bank and advise them of the loss and details of the scam. You should also contact Action Fraud and you may want to report it as a crime to the police.

New rights were introduced for victims of bank transfer scams in May 2019, giving more protection and increased chance of receiving a refund from banks. Having a good legal insurance policy in place may also help if you do fall victim to such a scam as many policies provide access to a legal advice helpline providing reassurance that you can seek legal advice when it comes to recovering any financial losses.

Protecting your business against cyber crime

Given the wide range of cyber-crime risks today, as a business it is important to train your staff to look out for things which don’t seem right and to keep on top of the latest scams which are being carried out. This will allow your business to continually educate yourself and those who work for you in what types of activity to be vigilant for. Have an open culture where staff feel comfortable to report any potential cyber-crime incidences as quickly as possible.

It may also be a good idea to consider taking out cyber insurance as a part of your wider business insurance package. Whilst many cyber insurance policies wouldn’t cover financial losses relating to bank transfer scams, they will provide cover for wide ranging impacts of cyber-crime such as costs linked to repairing hacker damage, costs linked to ransomware and extortion and costs linked to investigating the source of a data breach and restoring system security.

If you have any questions about cyber insurance, then do get in touch with our teams at Anthony Jones. We consider cyber insurance to be a vital element of a business’s insurance coverage given the risks cyber-crime presents today. Get in touch with us on 0208 290 9080 or email us at business@anthonyjones.com

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