fbpx
Contact Us

How To Avoid Financial Fraud & Scams

Go Back

Did you know you are 20 times more likely to be robbed while at your computer by a criminal based overseas than mugged or pick-pocketed in the street [1]?

In 2016, British people lost £2.1million every day as a result of financial fraud, totalling £769million per year (a £14m increase on 2015). Individual victims of cybercrime in 2017 suffered an average loss of £523 each [2].

The good news that many so-called ‘experts’ forget to mention is that in a lot of western countries, including the UK, banks are obliged by law to immediately return your money if your account or bank cards were used fraudulently. So, knowing this, how much should we actually worry about online financial fraud?

If the banks have to reimburse us, Do we Need Worry?

Unless the bank can prove you’re liable it must refund the money and also return any interest you would have gained. Under UK law you are liable for the first £50 but in practice most banks waive this. You won’t be liable for any losses once you have reported the incident so even if you simply have a suspicion, I suggest you just drop the bank a quick call to cover yourself.

For fraudulent credit card transactions, the Consumer Credit Act means your credit card issuer (e.g. American Express, Mastercard, VISA, etc.) are liable. Be aware that for some reason, the fraudulent amount needs to be between £100 and £30,000 for this legislation to apply. If the bank rejects your claim and the reasons it provides you believe are incorrect, you can complain to the Financial Ombudsman Service.

So why bother protect ourselves at all?

There are a few reasons;

  • They may not pay out. They’re unlikely to return your money if they find you to be ‘grossly negligent’ or acted in a way that violates your banking terms and conditions. They will deem you to be grossly negligent if you disclosed your PIN or online banking password to someone else or you clicked a link in an email that resulted in the fraud. These kinds of attacks convince us to facilitate the transfer of money ourselves (not a fraudster exploiting the banks systems and stealing the money directly from your account) and so banks will not reimburse our money as there was no failing on their part.
  • Time. How much do you value your own time? Even if they do reimburse the money eventually, retrieving your lost funds will be time consuming at best.
  • Identity theft. If you have money stolen as a result of someone stealing your identity, as far as the bank is concerned, you made the transactions yourself and until you prove it wasn’t you then they won’t return your money. Proving your real identity can be a lengthy, complicated and drawn out process. If you are a victim of identity theft you may have problems for years to come so the relatively small amount taken from your account now may unfortunately be the least of your worries.
  • In-direct fraud, blackmail and extortion. There are numerous ways fraudsters can defraud, blackmail or extort us without having to take the money directly from our bank accounts. Methods include;

o Social Engineering
o Malware
o Ransomware
o Cryptojacking

However your personal data got leaked and the fraudsters got hold of it, there are a common set of steps we can run through to help us recover our accounts and reinstate some much needed security!

Been a victim of fraud or a scam?

See below for a step-by-step plan for if you’ve suffered a scam or been victim of fraud…

Symptoms;
• You’ve either been notified by your bank or have seen unauthorised transactions on your bank account.
• You’ve retrospectively realised that you may have inadvertently provided your details to fraudsters/scammers.
• An alert on your credit file has been tripped and you’ve been notified of an unauthorised attempt to use your credit.

Steps to Fix:

1. Report it

Report the fraud to local law enforcement. In the UK, report it to Action Fraud online which is the UK’s national fraud and cybercrime reporting centre (call them on 0300 123 2040). For identity theft, report it to the UK police non-emergency number 101.

2. Call your bank

If you were made aware of the fraud or attempted fraud by any other means than your bank telling you, then call them and inform them so they place a fraud alert on your account. This will allow them to have increased monitoring in the months to come.

Also, ask your bank to not allow any changes to your account no matter what the circumstances and that changes need to be verified by calling you first.

Finally, I don’t recommend changing banks because your existing bank can step up their monitoring on your account (and if you switch you might start from scratch), however, if you are still being targeted it might be your only choice. If unauthorised payments are still occurring, do try changing banks (some banks do just have better security than others). Inform your new bank of the situation and they will then monitor your new account for fraud from the off.

3. Get your money back

The good news is that in many countries (including the UK), most banks are obliged to return your money immediately if your account/cards were used fraudulently.

4. Contact the FSCS

If your financial institute can’t reimburse you, in the UK you can contact the UK Financial Services Compensation Scheme (FSCS) who pay compensation to consumers if a company which is regulated by the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) is unable to pay a claim. Please note this only applies if they cannot reimburse you, not if they refuse to reimburse you. So, unless your bank has gone insolvent over the claim period this is unlikely to help with retail banks. However, it could help if you were defrauded through a more obscure avenue such as being convinced to invest through a registered company but it transpires the advice was a fraudulent misrepresentation and the firm then shut up shop.

5. Register with a Fraud Prevention Agency

In the UK, CIFAS is a special not-for-profit fraud prevention organisation. Registering puts a flag against your name on the National Fraud Database which other companies such as your bank or energy provider must automatically check before certain transactions can be made. It only costs £20 for a two-year membership and is a must-have if you’ve already been a victim.

6. Specific Debit Card & Email Address for Online Shopping

If you’ve been a repeated victim of online shopping fraud, it would be prudent to have a specific debit card you only use for online purchases. Have a separate email address for your online shopping and only have a limited amount of money in the debit account in case it is compromised again.

7. Support Yourself and Your Loved Ones

Being a victim of financial fraud can be emotionally draining. If you or someone you’re close to is a victim and the experience makes you feel anxious, fearful or guilty then contact Victim Support on 08 08 16 89 111 or Think Jessica if you’ve been a victim of postal/telephone fraud.

There lots we can do to protect ourselves and it doesn’t have to be overly complicated or difficult! Head over to the world’s first online community for parents where we help you get all your protection in place...

 

 

References:

[1] http://www.telegraph.co.uk/news/2016/07/21/one-in-people-now-victims-of-cyber-crime/

[2] https://www.telegraph.co.uk/money/consumer-affairs/cyber criminals-rob-109bn-from-uk-residents-in-a-year----and-eve/

Leave a Reply

Your email address will not be published. Required fields are marked *

Hacked Social Media Recovery Handbook!

Pop your email into the form below and we'll send you the link to your free handbook!

We hate spam and won't send you mindless marketing emails. We share some internet safety tips. You of course can unsubscribe at any time.

Free Protection Checklist!

Pop your email into the form below and we'll send you the link to your internet safety protection checklists!

We hate spam and won't send you mindless marketing emails. We share internet safety tips. You of course can unsubscribe at any time.

Free Cyber Bullying Handbook!

Pop your email into the form below and we'll send you the link to your free handbook!

We hate spam and won't send you mindless marketing emails. We share some internet safety tips occasionally. You of course can unsubscribe at any time.

Free I've Been Hacked Handbook!

Pop your email into the form below and we'll send you the link to your free handbook!

We hate spam and won't send you mindless marketing emails. We share internet safety tips. You of course can unsubscribe at any time.

Top