If you regularly make online payments, whether for goods or services, you’ll need to watch out for the latest technique fraudsters are using to get their hands on your money – push payment fraud.
Fugures from UK Finance, the banking trade body, have revealed that £236 million was lost to push payment fraud, with banks unable to return nearly three-quarters (74%) of the lost money.
In the vast majority of cases (88%) it was individual consumers who were conned out of their money, with an average loss of £2,784. The remaining cases were made up of businesses, who lost an average of £24,335 each.
What is push payment fraud?
Push payment fraud happens individuals or businesses are tricked into sending a payment to a bank account controlled by fraudsters. Most commonly used to take money during housing transactions, or when paying professional service invoices, fraudsters will con victims intercepting mail or hacking emails, before sending a payment demand posing as the legitimate business.
And because payments made using real-time payment schemes are often irreversible, there’s a good chance you won’t even be able to claim back the payment once you realise you’ve been conned.
What are the most common types of push payment fraud?
There are several ways that fraudsters use push payment fraud, including:
Property transactions – This kind of fraud can affect any party in a property purchase, including the buyers, sellers, estate agents and even the conveyancing solicitors. Fraudsters intercept the email chain between sellers, buyers, estate agents and solicitors, and change the payment information related to transfer of funds so that payments are diverted to the criminal’s account. Sums involved can be huge, and victims can be ruined.
Invoice fraud – Fraudsters either intercept emails, or make telephone calls purporting to be from an official body, to whom payment is owed, and get businesses or individuals to replace the genuine bank account details with those of the fraudulent account. This sort of crime also often occurs when individuals pay tradesmen for services and a fraudster sends an invoice pretending to be from your legitimate comtractor.
Account takeover – Fraudsters initiate push payments to new payees – often across different channels with the goal of outsmarting existing fraud controls.
How to protect yourself against push payment fraud
When you transfer money from your bank account, you usually have to give three bits on information, but only two of them are cross-checked by the bank. So, when you give the name of the payee, along with their account number and sort code, only the numbers are checked, so you could theoretically give in any name and it wouldn’t make any difference – giving the correct payee name is no guarantee the real payee will get the money.
In order to protect yourself or your business against push payment fraud, you should:
- Never give anyone your security details, such as your PIN or full banking password – at most, banks will ask for random characters from them.
- Never assume an email, text or phone call is authentic, these things are really easy to replicate.
- Never let yourself be rushed, a genuine organisation will never press you for information and will always be patient.
- Always follow your instincts – if something doesn’t feel right, there’s a good chance something is amiss.
- Always stay in control – don’t panic and make a decision you’ll regret, especially if you feel you’re being pressured into it.
Have you been a victim of push payment fraud? Share your experience with our business community.