Can you be scammed through a bank transfer?

United Kingdom By Liudmila Simakova August 26, 2022

It can happen to anyone

You’d be hard-pressed to find anyone in the UK who doesn’t use the internet to manage their finances, send money to family and friends and make money transfers to businesses to pay for goods and services.

Yet there is a downside. The rise in online banking and digitisation has meant the number of bank transfer scams have steadily increased over the past few years.

This article explains everything you need to know about bank transfer scams, including how they work, how to spot them, what to do if you’re the victim of a scam, and what you can do to protect yourself.

In this article

  • What are bank transfer scams?
  • Are there different types of bank transfer scams?
  • Common signs of a bank transfer scam
  • What to do in the event of a bank transfer scam?

What are bank transfer scams?

A bank transfer scam – also known as an authorised push payment (APP) scam – occurs when you transfer money from your bank account to a scammer’s bank account under false pretences.

Bank transfer scams occur when a scammer tricks a victim into transferring money. Scammers often pose as banks, legal professionals, or official bodies such as HMRC. They can target both individuals and businesses.

Every year, cyber criminals steal hundreds of millions of pounds from victims of bank transfer fraud.

Are there different types of bank transfer scams?

There are many different types of bank transfer scams and scammers use constantly evolving methods to trick people and businesses. Here are some of the most common forms of bank transfer scams to look out for:

Phishing

Phishing is when cyber criminals contact you by email, telephone, or text message, posing as a legitimate organisation. They lure individuals into providing sensitive data such as their ID, bank details, and passwords. Phishing is often the first step for scammers who can then use your information to commit other scams.

Fake president fraud

In this aptly named scam, fraudsters pose as CEOs of companies. The imposter convinces employees (often in the accounts department) to transfer money directly to their account. You may find it hard to imagine that any employee would transfer money to an unknown account, but this scam is becoming more prevalent.

APP scams

APP stands for ‘authorised push payment’. An APP scam results in money being transferred to a fraudulent account. To achieve this with businesses, criminals use identity theft, often posing as a supplier, employee, or manager. APP scams can also affect individuals. Fraudsters can pretend to be one your creditors, such as an electricity supplier, landlord, or delivery service. Scammers can also change bank payment details on invoices to suit them.

Social media scams

Criminals go to great lengths to portray themselves as trustworthy. Examples of how they do this include using official logos, almost indistinguishable website URLs and fake T&Cs that include phishing links. Unbeknown to the victim of this scam, by clicking on these links it will automatically send their personal information to criminal third parties, while also sharing the same scam to their social media connections. Consequently, their family and friends are then more likely to fall for the scam because they will think that it’s coming from a trusted source.

Common signs of a bank transfer scam

Here are some signs of scams that will help you remain alert and spot them quickly before they do any damage.

Urgent call to actions

Fraudsters often try to rush people into making a decision by creating a false sense of urgency. Fraudsters also play on victims’ fears and emotions. They may send messages threatening public exposure, job loss or a prison sentence if the money isn’t transferred immediately.

Unprofessional language

Texts, emails, and social media messages from fraudsters often include broken links as well as spelling and grammatical errors. A poorly written and badly constructed communication from a supposedly legitimate organisation is a tell-tale sign that it may be a scam.

Asking for sensitive data

At first, a text or email can appear to be from a trustworthy source, such as a bank or other financial provider. Yet remember that it could be a fraudster impersonating the organisation. Trusted organisations will never contact you and request your full password, PIN, or card details.

Unsafe links

A link in an unexpected email, text or online message could be trying to trick you into providing personal information. These links can also infect your device with malware that can capture any information you enter, such as passwords and bank card numbers.

What to do in the event of a bank transfer scam?

Don’t feel ashamed or embarrassed if you’re a victim of a cyber crime. As most of us now organise our finances and lives online, everyone is bound to be a target or victim at some stage. Here’s what to do if you think or know you’ve been a victim of a bank transfer scam.

Speak to your bank right away

If you believe that you’ve been a victim of a scam, you must call your bank or card provider without hesitation. Explain to the bank about what has happened and provide them with the relevant details about your account and where your money was sent. Your bank will then attempt to halt the transaction and recover your money from the fraudsters account.

Speak to the bank where it was sent

After speaking to your bank, you must also contact the bank where your money was sent. Let the bank know the fraudster’s account details as it may be able to stop the transaction. If you don’t feel the bank has acted quickly or appropriately enough to resolve the issue, you can contact the Financial Ombudsman Service.

Check your bank is signed up to the scam code

If a bank is signed up to the voluntary scam code, it will reimburse bank transfer scam victims and must commit to protecting you. This includes educating and informing you about scams, identifying risks, providing adequate warnings, acting quickly, and taking steps to prevent fraud. To uphold your side of the code, you’re expected to pay attention to warnings your bank provides, have a reasonable basis for believing that the transfer was legitimate, and take care against fraud.

Make sure you’re fraud aware

If you’ve been the victim of fraud once, you’ll be determined to stop it from happening again. Stay up to date with new financial scams as they appear and be cautious in any situation where you’re asked to transfer money. Try our quick fraud quiz to see how prepared you are to combat scams.

FAQs and guides