Save, make, understand money


BLOG: How to protect your savings from fraudsters

Paloma Kubiak
Written By:
Paloma Kubiak

During the Covid-19 national lockdown, criminals moved fast to use this unique set of circumstances to their advantage. Here’s how to protect your savings from fraudsters.

Sadly, it’s far from unusual for scammers to use traumatic events, such as a global pandemic, as a way-in when it comes to exploiting people at a time when many will be more vulnerable. This has led to an explosion in cases of fraud and cybersecurity breaches in the last few months.

UK Finance reported that nearly 15,000 impersonation scams alone took place in the first half of this year, which is a staggering increase of 84% year-on-year. More than half of the reported cases involved criminals impersonating police or their victims’ bank. The others imitated other trusted organisations, such as the NHS, often reaching out to people claiming to work for the ‘Test and Trace’ system.

Cyberattacks were also on the rise. The City of London Police, which is the national lead force for fraud and also runs Action Fraud, revealed it received nearly 4,000 reports of cybercrime during the first month of lockdown. These reports equated to £2.9m in reported losses, an increase of almost 72% compared to the previous month.

In light of this and as Cybersecurity Awareness Month concludes, it’s important to be more vigilant than ever and understand the kind of scams that are prevalent and what steps can be taken to limit risk.

Popular types of fraud to look out for

One of the most dangerous and common types of fraud is Authorised Push Payment (APP) Fraud, also known as bank transfer scams. This is an impersonation scam, where a criminal pretends to be the victim’s bank (or other organisation) and convinces them to make a transfer to them.

This can take the form of emails, texts or WhatsApp messages stating that a bank account is in trouble due to the crisis, for example. A scammer will use elaborate techniques to convince people to transfer their savings to a new account.

In some more sophisticated cases, the fraudsters will have previously hacked into emails in order to monitor activity and ‘intercept’ any planned transactions, contacting victims when they’re expecting a legitimate request for payment, for example if they’re expecting an invoice for repairs or if they’re exchanging contracts on a mortgage and transferring a house deposit to their solicitor. This type of scam can be incredibly elaborate, convincing, and damaging for the person involved.

A bank will never contact a customer out of the blue and ask them to move money to a bank account they don’t recognise. We would advise anyone dealing with such a request to terminate the call and to call their bank back on an authorised number.

Anyone who receives an emailed invoice or a request for payment over the phone to details they haven’t used before should also act with caution, even if they’re expecting a payment request. Always contact the party involved direct and verify bank details.

Another popular type of scam the Paragon financial crime team has dealt with during the pandemic are fake savings products paying rates substantially higher than those available. We recently found a website offering our savings products at a 5% interest rate. This was a fraudulent page aiming to gain personal details and we have taken the necessary steps to get it removed.  Our advice to customers would be that if a deal available online feels ‘too good to be true’, then there is a very good chance it is. Customers should always refer to best-buy tables when looking for the best rates and should only apply for accounts direct or through verified platforms.

Another common scam includes bogus emails offering a ‘free voucher’ or a fake competition, which usually claims to be from well-known brands. Although this type of scam was common before the pandemic, criminals have started to use the term ‘Covid-19’ to draw victims in.

These scammers say they are giving victims the chance to win a range of great prizes, but in reality, they just want to steal personal information.

With lockdown, a lot of people are spending more time at home and many have turned their attention to owning a pet. Scammers are making the most of the surge in demand for puppies or kittens by advertising pets for sale, which don’t exist.

Scammers will usually demand an upfront deposit payment and then disappear. They will often claim lockdown restrictions are the reason why the purchaser can’t see the pet, and sometimes they will even follow up with requests for more money to cover insurance, vaccinations and even delivery of the puppy or kitten.

Action Fraud advises prospective pet owners to do their research and look up reviews of any website they’re using to buy a pet. Ask to see the animal in person or via video chat, and for extra protection, use a credit card for payment.

Steps to stay safe

We’d advise people to be wary of unexpected contact. If a bank gets in touch out of the blue, this should be treated with caution. No requests to confirm personal information should be actioned. Emails that include click-through links should be ignored and no personal details shared.

Instead, customers should call the company that the communication claims to be from using a recognised telephone number to make sure that they’re dealing directly with them before sharing any details or responding to any requests.

People should also safeguard themselves against identity theft by making sure they never give out personal information to an unrecognised party. This includes confirming any details to cold callers, even if they’re just asking to verify information they claim to already have on file.

Steps should also be taken to ensure accounts and online devices are secure. Operating systems and virus protection software should be kept up-to-date. All accounts should have a strong password using a mix of letters (lower and upper case), numbers and symbols. Those must be changed regularly and different passwords can be used for each account.

We would also advise people to be careful when using public WiFi. Standard 3G or 4G connections will usually be a lot more secure than the WiFi in coffee shop or restaurant.

Being a victim of fraud can be incredibly damaging and traumatic for the individual involved, which is why prevention is better than cure. Scammers will often play the ‘long game’ with victims and target them at a point where their vigilance levels are low, so it’s best to make a habit of being cautious. If you think you’ve been a victim of fraud, you should contact your bank immediately so they can take steps to intercept the transaction and recover the funds.

Derek Sprawling is Paragon Bank’s savings director