Incidences on the rise
There is no doubt that the incidences of bank account fraud are on the rise. In 2023 UK Finance reported 116,324 cases of push payment fraud where a payer is deceived or defrauded into authorising a payment to a criminal. The scammers are becoming more and more sophisticated in their approach, and unfortunately, a well-researched organised crime group has for several months been specifically targeting our local residents here in the Channel Islands on an industrial scale.
The difficulty facing everybody is deciding in a split second if the caller is genuinely the bank calling to report fraudulent account actively or indeed the scammer spooking you into giving them information sufficient to allow them to take over control of your account.
Scammers target HSBC customers
Our observations on this latest wave of bank frauds are that these scammers appear to be specially focused on customers of HSBC.
The scammers pretending to be members of HSBC staff, mispresenting their correct caller telephone number, or mimicking the approach taken by the bank even down to the music they are playing in the background. They are very convincing, even more so when you check the incoming phone number and realise that it is purporting to come from the HSBC number on your bank card.
Once they have you on the phone, they will become increasingly pushy claiming that your account has been compromised and trying to coerce you into making a quick on the spot decision. Many victims report that the callers have possession of confidential information like their home address or mobile numbers and sometimes even account numbers. The real reason is they are trying to trick you into giving them your personal information, getting you to divulge your internet banking passcode, or to click a link on an erroneous link.
In some cases, they may even try to activate your on-line banking prompting the bank to send you a security code while you are on the phone. Once you have read back the security code to them, they will have full access to your accounts and will likely take-over your on-line banking profile.
HSBC and their bank staff will never ask you to divulge a security code, or any code sent to you by SMS. A request for a code over the phone is a sure sign that you are speaking to a scammer.
Act Fast, don't wait
If you think you have been scammed Act Fast, don't wait! The faster you report the matter to your bank the better. They can take steps to freeze your account preventing further losses and affording the bank the opportunity to lodge a recall request to the recipient bank. The success of such recall requests is unfortunately varied and in many cases the money is not recovered.
All forms of fraud are a crime and the real impact of these frauds on people's lives is significant particularly where life savings are stolen leaving victims in considerable financial hardship. We should not under-estimate the distress and hardship caused by the actions of the scammers and how vulnerable people are left feeling. Victims often report a very poor level of customer service when reporting a fraud to the bank compounding the level of distress caused.
Mitigate the risk
Banks in Jersey are not members of the UK Contingent Reimbursement Model Code ("CRMC"). In the UK the signatory firms to the CRMC commit to
- protecting their customers with procedures to detect, prevent and respond to APP scams, providing a greater level of protection for customers considered to be vulnerable to this type of fraud;
- greater prevention of accounts being used to launder the proceeds of APP scams, including procedures to prevent, detect and respond to the receipt of funds from this type of fraud; and
- reimbursing customers who are not to blame for the success of a scam.
No such agreement and protection is in place for Jersey and reimbursement is considerably more challenging where the victim has disclosed their security code details. We believe that this creates a significant gap in the protection afforded to Jersey account holders. Banks in Jersey are however expected to operate adequate systems and controls to mitigate the risk of fraud including monitoring your account to detect any unusual account activity.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.