Stay safe….including from bank transfer fraud

26th Oct 2020
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Everyone wants to make and receive payments securely and going digital is one of the best ways to do that. But you’re not out of the woods just by ditching cheques and cash in favour of electronic bank transfers. Although bank transfers might seem foolproof, they are far from it. In the first half of 2020 consumers lost £207.8 million to bank transfer fraud. No one wants to be part of that statistic.

So, what is bank transfer fraud? Bank transfer fraud, also referred to as Authorised Push Payment Fraud, occurs when someone is tricked into transferring money to a fraudster’s account. This can happen in many ways, but one of the most common involves a scam artist impersonating a trusted organisation or a person you know – something called spoofing, and a common situations is when a professional is asking for money, such as solicitors or accountants - a bill your client is expecting, why wouldn't they just pay?! 

But aren’t banks supposed to reimburse consumers when money is taken fraudulently? Regulations protect consumers when a payment is not authorised and in those cases banks are required to refund the money, but bank transfer fraud exists in a grey area because often the consumer willingly transfers the money when they are tricked. In an effort to protect unsuspecting people caught by a bank transfer scam, the Contingent Reimbursement Model Code was initiated in May 2019. The code is voluntary, but many banks have signed up to it, promising to reimburse customers who lose money to bank transfer scams. You’d expect the code to have a positive impact on consumers, but unfortunately, the proportion of money refunded by banks to scammed account holders is still woefully small and has actually fallen since the introduction of the code. 

If you can’t rely on banks to reimburse you, then what can you do to protect yourself from bank transfer scams? First, keep up to date on the fraud alerts sent out by your bank, so you’re aware of the latest scams and how to protect yourself from them. Second, do your utmost to make sure the person you pay is genuine and they are actually delivering the service you’re paying for. Finally, make sure to keep documentation, like text messages and emails, that relate to payments. If you have fallen victim to a bank transfer scam contact your bank and the bank the money was sent to as soon as possible. Don’t delay in reporting the fraud just because you feel embarrassed. Many people fall for these scams, even those who consider themselves savvy consumers.  

Another way you can avoid bank transfer scams is by using Ordo. Ordo is a low-cost, secure, and easy to use payment service. There’s no sharing of sensitive payment data and consumers see who they’re paying before they pay, and it's the title of your bank account so it can't be spoofed. Ordo is also authorised by the FCA and on the FCA’s Financial Services register so you know they’re legitimate (their company name is The Smart Request Company Ltd, trading as Ordo).  Try Ordo for free or learn more and keep your payments and clients secure.