Stay Alert: Types of Bank Fraud and How to Recognise Them

The thought of someone scamming you out of house and home is terrifying. So, for everything you need to know about bank fraud, read on…

Cases of fraud occur every single day, scamming banks and individuals out of millions at a time. What with the coronavirus turning peoples’ lives upside down right now, people and companies are even more vulnerable to scams. So, we must be even more vigilant than we ever have been before.

In this article, we’ll be going through the types of bank fraud, including push payment fraud, cheque fraud, and credit card fraud, amongst others. What’s more, we’ll dive into how scammers can get this information to con you, as well as the ways you can protect yourself. So, for all this and more, you came to the right place…

Types of Bank Fraud to Look Out For

There are a huge number of different types of banking frauds out there, where a scammer will falsify or steal information to gain money. Whether it be from a company or individual, every single one of us is vulnerable to scams like this. Clearly, it’s important to be vigilant, so here are some classic types of bank fraud which you should be made aware of:

Company Hijacking

The first type of bank fraud out there occurs when hackers alter a company’s address or details over on the registered government body sites, like Companies House. This way, they can obtain cheques to their address, purchase items through the credit card to their address, and so forth.

Address Mirroring Scheme

Similarly, criminals can also closely mirror a company’s address, to obtain money, goods, and services under the company name. This is a pretty efficient way to take advantage of any weak transaction systems out there, which don’t scan the entire address. You may be surprised to learn that this is a common occurrence.

Push Payment Fraud

In a similar way, fraudsters can impersonate a company entirely, through pretending to be a key worker in the business. This way, they can trick clients or customers into giving them personal information, including bank details. By pretending to be someone of consequence, you can better con people into handing over their details or money.

Card Payment Scams

Not only do companies get hacked, including banks, meaning the general public become vulnerable to tricksters, they also personally target people too. Some classic types of card payment frauds to avoid include:

• Stolen Card Fraud: when a card and PIN is stolen, and a payment is made using this card to either buy something face-to-face in store, or over the internet.
• Authorised Push Payment Scams: this occurs when a fraudster asks for a payment to be made to a different account, usually an account that doesn’t belong to the original recipient.
• Remote Purchase Fraud: this is when card details are fraudulently found over the internet, through phishing emails, texts, or calls. Then, purchases are made through this.
• Counterfeit Card Fraud: on another vein, scammers can actually make payments through the use of fake cards, by using technology to steal the card’s details from the magnetic strip on it.
• Card Not Received Fraud: when somebody receives a new debit or credit card via post, this can be intercepted on the way. This usually happens in residential flats or office buildings, where post isn’t very secure.
• Card ID Theft: this occurs either when a fake bank account is set up under someone’s name, or when a genuine bank account is taken over by a criminal. In both of these cases, the victim’s social media is used to figure out all the details.

Insolvency and Bankruptcy Fraud

A classic case of fraud is when a company, who is just about to go bankrupt or insolvent, fraudulently trades despite this. So, they make false claims about their monetary situation, with the guise of being able to pay the money, when they actually can’t.

Telephone Banking Fraud

Once a fraudster has your card information, anyone can use it to make payments over the phone.

Mobile Banking Fraud

Similarly, once a fraudster has your banking information, they’re able to log into your mobile banking apps. Once they’re in, they can make any transactions they wish.

Cheque Fraud

This speaks for itself really, but there are three types of cheque fraud that must be looked out for. There’s the issuing of completely false cheques which are made to look real, or there’s the forging of someone’s signature on a real cheque. Alternatively, someone might send a cheque off with all the correct information, and then a scammer alters the cheque to suit their purpose.

SMS Swaps

This occurs when a scammer steals a victim’s phone number and a phone security ID. Then, they’ll contact the SIM provider, claiming they’ve lost their phone, have a new SIM card, and need their old number back. In doing so, any online banking confirmation text messages will go straight to them for them to log in.

How do Hackers go About This Fraud?

The big question is, how exactly do scammers go about sourcing this information? Well, we are more vulnerable than you might think, and there are a huge number of ways they can steal this information. Some of these include:

Phishing

Phishing is one of the most common ways that a fraudster can gain your information. In these cases, the scammer will create a fake website, or send a message from a fake number of email address, claiming something.

This could be a link urging you to make vital changes to your bank account, or anything in between. Once the link is clicked, who knows what sort of malware could be downloaded onto your device. This can basically create a “back-door” entry into the device to obtain information.

Alternatively, you might be urged to fill in your information, but either way, your details can be stolen. These sorts of phishing scams occur through a number of mediums, including:

• Email
• SMS
• Websites
• Phone call
• False invoices

Fake Competitions

This is pretty similar to phishing, but usually involves an internet pop-up claiming you’ve won a certain competition. In these cases, if you fall for it, you’ll be encouraged to fill in your bank details to enter and receive your prize.

Distraction Method

One classic way of obtaining someone’s card or bank details is through distracting someone in person, whilst they’re taking out money at an ATM. Normally, a pair or group of people will come together to work their charms or pull on their heartstrings. This way, they can steal money coming out of the machine, or even steal their card.

Machinery

These days, there is so much technology that allows fraudsters to steal your card information on the street, without even touching you. For example, there are machines which can read your card when it’s in your bag or pocket, stealing the information from the card itself.

On a more personal level, false ATMs are a classic means of stealing someone’s card or PIN. In many cases, the card gets stuck in the machine, and the victim must walk away without it. In other cases, a camera is fitted to the ATM so the PIN can be copied, and the card is then stolen and used.

Classic Examples of Bank Fraud

So, how can you go about recognising these attacks? After all, there are times when our bank will genuinely want to contact us, and we’ll need to sort something out. Well, to discover some actual examples of these sorts of scams, some include:

• Fake Account Lock: receiving an SMS text from the bank claiming they’ve locked your account for security purposes, and you must click a link to proceed.
• Man-In-The-Middle Attacks: when scammers attack banking infrastructures that aren’t protected properly, this can be detrimental to the bank and the users.
• Man-In-The-Browser Attacks: hackers can also infect online browsers, modifying payments once they’ve been made. This occurs when the site is insecure, even with an SSL certificate attached.
• Mobile Malware Attacks: these are false mobile banking apps which steal all your banking information when you fill it out.
• Spear Phishing Attacks: phishing doesn’t just have to be generalised, but it can actually be very personalised. Through sending very realistic emails to someone of significance, with a lot of money, a scammer can illicit large sums of money from someone.
• Fraudulent Address Changes: this occurs when a fraudster convinces the bank, over the phone, that they’ve changed addresses, and a new card is sent to the new address. Then, the account can be emptied.
• House Offer Fraud: a scammer might also submit house offers across the market, way above the market value, using false identities. Then, they can default the mortgages, and make millions along the way.

How to Protect Yourself from Bank Fraud

So, with all these ways you might be vulnerable to a bank scam, what are some ways you can better protect yourself from them? Well, some top tips include:

• Recognise the signs, through the examples above.
• Check and double-check your payments.
• Keep passwords and PINs safe, and away from prying eyes.
• Keep your address as private as possible.
• Be sure not to share your bank details over the internet or through social media.
• Be cautious of online deals.
• Pay attention to warnings from the bank, via email or text, or on their website.
• If you are told something has happened to your account via a text or email, check first to see if it’s true.
• Never give your bank details over the phone; your bank will never ask for these things.
• Keep all your technology up to date.
• Don’t trust strangers, and be sceptical of all communication you receive.

Now You’re More Prepared Than Ever…

Here, we’ve clued you in on the many ways fraudsters can scam you or your company out of your hard-earned cash. So, I hope now you feel a little more prepared to know what to expect from scammers, and how to protect yourself.

Have you ever been scammed out of a large amount of money? Or, have you simply had a recent experience with fraud which you, thankfully, avoided? Let us know, in the comments below, so we can stay educated and curb these fraudsters.