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The cost of scams rising

Posted 09 November 2015

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Do you know how to spot a scam? If you’re scammed it’s not guaranteed you’ll get your money back, so make sure you know how to protect yourself.

Unfortunately, the Scottish financial news have reported that the number of Royal Bank of Scotland customers who are falling foul of scams is on the rise, as is the average cost of the scams themselves.

RBS, one of the biggest banks in Scotland, says it saw 5,000 of its customers become victims of this kind of crime between January and September this year. And, shockingly, the average “cost” of being scammed has shot up by 40%, and now lies at £13,000.

So why is this area of crime on the rise and, if you are a victim, are you entitled to a refund from your bank?

Why are the numbers on the rise?

It seems the ways in which fraudsters are trying to get money out of people are becoming more and more sophisticated which has led to the rise in the numbers. Fraudsters may become more active in this area as they start to realise how technology and modern communication can be used to their advantage.

NatWest, which is a part of RBS, have reported that their customers are most often conned by a form of scam called vishing. This is where people are tricked into giving their personal account details over the phone, so the fraudsters can make transactions.  

The BBC reports that there have also been cases where the victim is contacted on the phone by someone claiming to be from their bank. The caller tells the victim that there has been recent suspicious activity on their account and that they have to transfer their money straight away to another “safe” account. In reality, this account belongs to the fraudster and the victim never sees the money again.

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Will my bank refund me the money if I’m scammed?

The answer to this is, only in some cases. If you had your card stolen and someone managed to use it to purchase things online, your bank would refund the money lost in this case. If you were a victim of vishing and you gave bank details but did not actually authorise any transactions, the bank would refund you under the Payment Services Regulations.

However, if you actually give your accounts details and authorise the transaction then your bank is under no obligation to refund the money to you unless their error, delays or advice they gave you actually led to you being conned. Banks have been known to give refunds in these cases in the past, but they certainly do not have to.  Have a look at Which? to find out how you can try to get your money back if you’ve been conned.

In the same report from the Scottish Financial news, we learn that a staggering 70% of RBS customers who are victims of fraud, never see their money again. When you see statistics like that, it really brings home the importance of arming yourself with the knowledge you need to protect yourself from being conned.

How to protect yourself

The important thing to remember here is that no matter how convincing the person at the end of the phone is, the scam won’t work unless you actually give them your details and transfer the money. Don’t ever, ever do this. Tell them you want to call them back and hang up the phone. It’s vitally important that you wait a few minutes before you call bank –  scammers can sometimes stay on the line, so when you dial back you’re actually still speaking to the scammer. Make sure that you call the number for your bank that is on their main website – not one that the caller has given you.

The head of fraud at RBS has gone on record stating that they would never contact a customer over the phone and ask them to make a payment. If you’re being told that it’s your bank you don’t have to believe them.

Also, when a legitimate financial firm contacts you, they will ask you for security details before they impart any sensitive information at all. If they don’t they will be breaching Data Protection Laws. When you originally opened your account, you’d have created a password and given the answers to other security questions, for instance a memorable place. The bank would have provided you with a telephone banking security number, which protects your details further. If someone on the phone contacts you and just starts talking about activity on your bank account – or any other account that you have for that matter – without taking you through security, then this is a huge red flag.

Staying financially secure is so important and we hate the idea of anybody falling foul of these scamming tactics. For more information on how to stay safe and what to do if you suspect you’ve been scammed then have a look at The Money Advice Service’s website

 

 

by Christine Walsh

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To find out more about managing your money and getting free debt advice, visit Money Advice Service, an independent service set up to help people manage their money.