How to protect your money from phone fraudsters

Money lost through phone scams has tripled to £24m, and the banking industry is so worried it has launched an advertising campaign explaining how customers can protect themselves from fraudsters whose approaches are becoming more sophisticated and brazen all the time. The conmen and women are often plausible, so be on your guard.

Research for Financial Fraud Action UK (FFA UK), which represents banks, building societies and card companies, shows that a quarter of people do not challenge callers asking for financial information, while a sizeable minority would respond positively to requests from fraudsters in the mistaken belief that these were coming from their bank.

10 per cent of respondents would either hand over cash to a ‘courier’ or transfer money to another account if asked to do so.

More worrying, 10 per cent of respondents would either hand over cash to a “courier” or transfer money to another account if asked to do so.

Four in 10 people are unaware of a common trick used by fraudsters, whereby would-be victims are asked to hang up and call their bank to verify their identity. The fraudster stays on the line, which can remain open for up to two minutes, while victims ring a number and find themselves talking to another fraudster.

Fraudsters, in scams known as vishing, do not just pose as bank employees, they also pretend to be police officers or representatives of computer companies. They are after bank PIN numbers and passwords and often ask people to transfer money or hand over cash to a “courier”.

Scam victims

Mary Berners-Lee, a mathematician and mother of world wide web founder Tim Berners-Lee, was a victim of a sophisticated scam that netted the fraudsters £3,000 in cash. She told BBC Watchdog she received a phone call, purportedly from a police station, telling her that her debit card had been cloned and £850 withdrawn.

Mrs Berners-Lee was asked to ring a number on the back of her card and she ended the call so she could do so, forgetting that the line she was using remained open. When she rang the number on her card, she was greeted by someone from the "National Fraud Department", who told her a bank employee was giving away details of customers' bank accounts and cards, and she should go to the bank and withdraw £6,000.

The woman behind the counter told her she was in danger of being defrauded and she left empty handed. She called the fraudster, who told her to go back to the bank and withdraw £3.000. Mrs Berners-Lee and her husband went to the bank and saw the manager, who warned them they were being scammed, but they insisted and withdrew £3,000.

When they arrived home, a "courier" collected the money - and it was only as she made her way to bed that she realised what had happened. But there was a happy ending: her bank reimbursed her.

People can also be defrauded if mail is stolen that contains banking details. This is what happened to a travel company director who received a call from his "bank" about staff salaries that should have been paid, but had not processed.

The caller said she was happy to complete the transactions, but needed his online banking security code. He gave her this and payments of £99,500 were then made - to the fraudster, rather than the company's staff.

It was not easy for the bank to identify that fraud had taken place because the amounts that had been processed were in line with usual business activity. After doing so, the travel company received its money back.

Detective Chief Inspector Perry Stokes, head of the dedicated cheque and plastic crime unit, said: “Always be on your guard if you receive a cold call and are asked for personal or financial information, or to hand over your card or cash to someone. The bank or the police will never tell you to take such actions, so if you’re asked it can only be a criminal attack.”

Always be on your guard if you receive a cold call and are asked for personal or financial information. Detective Chief Inspector Perry Stokes

To get you on side, callers often claim you are a victim of fraud and you need to take action. But FFA UK says your bank or the police will never: phone and ask for your PIN number or online banking password; ask you to withdraw or transfer money; send someone to your home to collect banking details, cards or money.

If you receive a call like this, hang up and wait five minutes to clear the line. Then call your bank or card issuer to report a fraud. If you become a victim of fraud, your bank or card issuer will usually take the hit financially, unless it is deemed that there has been gross negligence on your part.