Banks Warn of Big Increase In Online Scams

Payment frauds are increasing, and in 2022, banks had to pay millions of pounds per payment to reimburse customers scammed into transferring money online. Bank customers lost 583 million pounds in APP scams in 2021, 39 per cent more than the amount paid in 2020(the Payment Systems Regulator data).

Barclay reported that 77 per cent of the scams originate on social media, dating apps, and other online platforms like WhatsApp. For example, on WhatsApp, the impersonation scams tripled in one year. 

In addition, there has been a huge increase in cases of impersonation, purchase fraud, fund transfer, and investment fraud through social media platforms like Facebook marketplace. 

Facebook representatives believe this has been an industry-wide problem, so they are not just accountable. However, banking systems are adopting various methods to block scams, and new regulations have been made, like the financial services advertisers need to be authorized by FCA to promote products. 

Also, the authorities organize and promote many consumer awareness campaigns to guide people in spotting fraudulent online and offline activities. 

Banks' Caution About The Growing Money Transfer Scams

Lloyds Banking Group fraud prevention director Liz Ziegler explained that over 70 per cent of the scams originate through main tech platforms. 

So they recommend strategies to hold the tech companies liable for not functioning to prevent scams at the source to protect innocent clients; on the other hand, most banks are now facing an epidemic of scams, with an increase in 87 per cent of frauds, where nearly 60 per cent originated on social media and tech platforms.

As per NatWest, there has been an 87 per cent increase in fraud. The scammers offer items they never intend to sell, which is common on social media like Facebook and WhatsApp.

Many banks and financial organizations want the tech companies offering financial outlets or advertisements to take responsibility for the losses arising out of spam communication and activities on tech websites, as most banks had to pay huge amounts to the customers as refund coverings against the losses suffered by the customers in the first half of 2022.

Reimbursement Plans For Lost Money 

PSR has been publishing caution messages, and they said that the bank that accepts the transfer of the money request and the bank that received the funds into the scammer account both need to split the reimbursement bill. In addition, it states the processing costs and fees imposed on the customer should be less than 35 pounds.

The banks NatWest, Lloyds, and Barclays signed a reimbursement agreement called the Contingent Reimbursement Model Code, which will reimburse the victims who lost an authorized push payment AAP scam. It is a scam where the account holder transfers funds into a scammer's account. 

Some banks are reimbursing such fraudulent money, but the number of scams continues escalating, and the online safety bill has been going through the parliament procedures for over a year. Furthermore, the government must take steps to prevent fraud and ensure customer protection against such activities. 

Online Scams are Spreading Worldwide

Further, a common trend has been seen that most such frauds start in the UK and then move to the US and other parts of the world, and the number of such attacks continues to grow yearly. Since data breaches are increasing, a lot of personal information is available to criminals that they are taking advantage of. 

People are losing to crooks who fake a website and impersonate the staff of a reputed organization. Banks have refunded some of the lost money, but it would be best to provide the customer with tools to protect against malicious fund transfer activity. Especially since the provision of faster payment systems is growing, it facilitates faster fraud. 

So users should be careful and never let anyone move money through their bank account in return for a fee, or they should be aware of the risks of people who use their account to send money 'in error', and then they may ask them to transfer the funds to another account. 

One should be cautious of romance frauds that involve the risk of becoming an unwitting accomplice to money laundering. Credit/debit card fraud and shoulder surfing have grown as scammers use tactics to get card IDs, and then they take over your existing card account. 

Online scams are sometimes driven by fake apps and websites that may appear legitimate but are malware that steals your bank or card-related data. Also, one should be aware of the risks of spoofed calls from banks, where you can get automated robocalls or pre-recorded messages about suspicious payments through your account.