New laws to help victims of financial scams have been announced by the Government as part of the Queen’s Speech.
The Financial Services and Markets Bill, announced this week, will require banks to reimburse victims of authorised push payment fraud.
It comes as hundreds of millions of pounds is lost each year to such scams. It is hoped that the tighter rules will make sure victims are not left to pay huge sums for fraud when they are not to blame.
So, what is authorised push payment fraud and how can businesses and individuals protect themselves from it?
Authorised push payment fraud
This is the term for when fraudsters get their hands on an individual’s information and then present themselves as a company who the victim is already doing business with.
The fraudster will then ask for payment to be sent to a bank account that is supposedly held by the business they are claiming to be from.
Worryingly, the scammers will use the hacked email to find the most opportune moment to strike, such as when a certain payment is due to a company, in order to sound more believable to the victim.
If the victim makes the payment via online banking, the scammer then walks away with the money.
How can businesses protect themselves?
Businesses, as well as consumers, can be targeted by these scams, so it is important for organisations to have safeguards in place.
- Change passwords regularly – This can be an annoyance, but it is important to make sure that passwords are changed at regular intervals and are a mixture of upper and lower-case letters, numbers and special characters. Password management software may be useful if you find his difficult.
- Use common sense – Follow your gut instincts, if something does not feel right, it probably isn’t. Don’t immediately make a payment if something feels strange. By pausing and thinking, you may end up saving your business losing a large amount of money.
- Pick up the phone – If a request for payment does not feel right, call the company it is supposedly from to check that it is real. Use the contact details online or on their paperwork, do not use the details from the email.
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