A caller claiming to be from Mr Gear’s bank used knowledge of the online bank’s security procedures to convince him to transfer the funds.
Authorised Push Payment fraud is when a business or individual is conned into transferring funds to a scammer posing as a genuine payee or for a seemingly legitimate purpose which turns out to be fraudulent e.g. transferring money because the victim believes their money to be at risk.
Scammers will use social engineering techniques, such as impersonation or ‘catfishing’ to convince the victim they are genuine. They do this in various ways, such as claiming to be from the victim’s bank or building society, approaching the victim online to start a ‘relationship’ or asking them to invest in fake schemes.
The end goal of an APP scam for fraudsters is to convince the victim to willingly transfer a sum of money, often by coaching them through banks’ security procedures, to a second account. Once the money has been transferred to the scammer’s account it is moved on swiftly, often overseas, making it very difficult to trace and recover.
In the UK, banks and financial institutions have responsibilities to protect and safeguard their customers from scams such as the one Mr Gear found himself a victim of.
There is increasing pressure on banks to take steps to prevent fraud by:
- Monitoring customer accounts to counter risks.
- Having systems in place to identify unusual transactions or other indicators that customers may be at risk of fraud.
- Making additional checks and/or declining payments to protect consumers from harm.
- Staying aware of common invoice intercept scam tactics.
Mr Gear was lucky in that his bank, Starling, did eventually refund the lost money, but this is not always the case, and many victims of similar scams have seen their banks place the blame on the customer themselves and refuse refunds.
In such cases, the claim can be taken to the Financial Ombudsman Service (FOS), a Government-backed body responsible for resolving disputes between financial institutions and customers, for an independent investigation.
If you, your business, or someone you know has fallen victim to an impersonation APP scam, the first thing you should do is report the scam to the police, Action Fraud, the National Fraud and Cyber Crime Reporting Centre, and also your bank.
However, there are some steps you can take to protect yourself from becoming the victim of such scams in the first place:
- Shred paper documents containing sensitive details such as your name, address, bank details or other financial information before disposing of them.
- Do not share your security details, full passwords, login details or bank account numbers with unsolicited callers or via email – even if they are claiming to be from your bank.
- If you have concerns about the legitimacy of a phone call from your ‘bank’, even if the number is correct, hang up and use another phone to call the number printed on the back of your bank card or bank statement.
Head of the APP Fraud team at TLW Solicitors, Sarah Spruce, commented:
It is alarming to see how easily the scammers behind these impersonation APP scams are able to coach victims into bypassing bank security systems and transferring large amounts of money, as happened with Mr Gear. He was very lucky that his bank eventually refunded the amount, but many clients we have seen have not been so fortunate.
Our team works with many similar clients where their banks have not refunded the money lost to scammers. Banks are increasingly being held to account for not protecting their customers sufficiently, but it is also important that customers understand how to spot the warning signs of a potential APP scam.”
If you, your business, or someone you know has been targeted by an APP scam and are being refused compensation by your bank, TLW Solicitors’ specialist and dedicated Authorised Push Payment (APP) Fraud team can help you make a complaint to the Financial Ombudsman Service (FOS) for compensation.
Our extensive experience dealing with FOS claims means that we are up to date with the many complexities and strict timescales involved with lodging an application and can keep you up to date and informed throughout the process. We work on a ‘no-win, no-fee’ basis meaning that, if your case is unsuccessful, we will not charge for the time we have spent. If you or your business has been conned into making payments to fraudsters, please get in touch for a confidential, no-obligation discussion.
You can call us on 0800 169 5925, email firstname.lastname@example.org or complete one of the online forms below.
It is important to get advice as soon as possible as strict time limits can apply.
Meet Sarah, who heads up our experienced Authorised Push Payment Fraud Claims team.
Sarah and her colleagues are on hand to help with your claim.
- Always fight your corner.
- Explain anything you don't understand.
- Provide full transparency on our charges.
- Never ask for any upfront payment.
- Recover the best compensation we can.
- Keep your personal information safe.
- Respond quickly to any queries.