Expats Alerted To Increase In Fraudulent Bank Transfer Scams

Published:  11 Dec at 6 PM
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Criminals are ramping up their bank transfer scamming activities, with expat investors warned to take care when making bank transfers to UK solicitors

The UK’s Payments System Regulator has issued a warning over a sophisticated bank transfer payment scam which netted scammers over a million pounds in the first half of this year. Some 19,000 people were affected after being trapped in authorised push payment schemes targeting legal firms’ clients.

The scam begins when hackers intercept unencrypted emails between solicitors and their clients containing bank transfer details. A majority of legal firms in the UK have protected office networks but a vast number of emails to clients are sent without encryption, thus opening the door for the scammers’ hacks.

Once the email is hijacked, the crooks change the bank details to their own accounts before forwarding the email to the client waiting for payment instructions. Typically, payment would be for a deposit on a property. Once the victim has transferred the funds, they’re immediately switched to an overseas account, leaving the client in ignorance until a second request for payment is sent by the solicitor.

The Payment System Regulator is the authority responsible for overseeing bank transfers, and has been working on the scams since a major complaint was made by consumer protection watchdog Which. There’s no information to date as to how many expats investing in UK buy to let properties have lost out as a result of the sophisticated fraud. At present, the PSR’s enquiry is going well, with the aim of introducing a new compensation scheme in September next year.

The government’s watchdog Financial Conduct Agency is also investigating banks’ anti-fraud systems, with findings so far indicating many have procedures unable to readily detect the action of fraudsters and are not collecting enough data on transfers. Which’s CEO is happy the regulator is on consumers’ sides in the issue, adding reimbursement of losses to scams should be fast and banks should immediately tighten up on anti-fraud measures.



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