Trust and security / APP fraud prevention
APP fraud prevention
APP frauds, or Authorized Push Payment frauds, involve the manipulation or deception of individuals or entities into authorizing the transfer of funds from their own account to another, often controlled by criminals. These frauds typically occur when victims are tricked into making payments under false pretenses, such as through deceptive emails, phone calls, or messages. Once the payment is authorized, it is often difficult to recover the funds, as they are swiftly moved or withdrawn by the fraudsters.
UK Finance in their Annual Fraud Report have identified 7 different APP fraud typologies as follows:
Purchase scams
Scammers frequently advertise counterfeit or nonexistent products for sale on social media platforms and online marketplaces. Their postings often appear authentic, and individuals within your network might unknowingly share or repost them.
How it could happen to you:
- You encounter an advertisement on social media or a trusted website. While it appears to originate from a legitimate company, the provided link redirects you to a fraudulent website. As a result, you either pay for a non-existent item or unknowingly provide personal information to a fraudulent entity.
- You chance upon a second-hand deal on social media or an online marketplace. The seller may offer expedited delivery for an additional fee. After payment, however, the item never arrives.
- You come across an enticing offer for flights or vacation rentals. Upon payment and receipt of a confirmation email, you arrive at your destination only to discover that the booking was fabricated.
How to protect yourself:
- Exercise caution, as scammers adeptly mimic reputable brands. Verify the authenticity of deals by visiting the official website of the company. Manually enter the website address into your browser instead of relying on links within advertisements to prevent redirection to counterfeit sites.
- Prior to making any payments, conduct research on the website or seller, and scrutinize for fraudulent or negative feedback.
- Be wary if you are unexpectedly prompted to utilize an unfamiliar payment method. For instance, if your typical payment method involves card transactions or digital wallets, but you are requested to make a bank transfer instead.
- When purchasing items via social media platforms, endeavor to physically inspect the product, particularly for high-value acquisitions.
- Avoid agreeing to procure vouchers or expensive items like jewelry or precious metals on behalf of others as a means of payment.
- Keep in mind that if an offer appears excessively favorable, it is likely fraudulent.
Investment scams
Understanding Investment Scams: How to Recognize and Protect Yourself
Investment scams continue to pose a significant threat to individuals seeking financial opportunities. Fraudsters employ various tactics to lure unsuspecting victims into fraudulent schemes, often resulting in substantial financial losses. Understanding the modus operandi of investment scams is crucial for safeguarding your finances and making informed investment decisions. Below, we outline common investment scam scenarios and provide practical tips on how to protect yourself:
How it could happen to you:
- Unsolicited Contact: You receive unsolicited emails, phone calls, or social media messages promoting lucrative investment opportunities. The scammer may claim to represent a reputable financial institution or offer exclusive access to high-yield investments.
- Pressure Tactics: Scammers use high-pressure sales tactics to create a sense of urgency. They may emphasize limited-time offers or tout the potential for quick returns to compel you to invest hastily without conducting proper due diligence.
- False Promises: Fraudulent investment schemes often promise unrealistically high returns with minimal risk. These promises may be accompanied by misleading testimonials or fabricated success stories to instill confidence in potential investors.
- Complexity and Secrecy: Scammers may use complex investment strategies or obscure the details of their schemes to obfuscate fraudulent activities. They may discourage questions or provide vague explanations to conceal their true intentions.
- Ponzi Schemes: Some investment scams operate as Ponzi schemes, where returns are paid to earlier investors using funds from new investors. This unsustainable model eventually collapses, resulting in significant losses for later investors.
How to protect yourself:
- Verify Credentials: Before investing, research the credentials of the individual or company offering the investment opportunity. Check for registration with relevant regulatory authorities and verify their professional licenses and credentials. You can check here https://register.fca.org.uk/s/ firms and individuals which are authorised by the Financial Conduct Authority (FCA).
- Conduct Due Diligence: Thoroughly research the investment opportunity, including the company's background, financial health, and track record. Beware of investments that lack transparent documentation or refuse to provide detailed information upon request.
- Question Unrealistic Returns: Be skeptical of investment opportunities promising unusually high returns with little to no risk. Remember the adage: "If it sounds too good to be true, it probably is." Exercise caution and seek independent financial advice before committing funds.
- Avoid Pressure: Refrain from making impulsive investment decisions under pressure. Take the time to carefully evaluate the opportunity, seek advice from trusted financial professionals, and avoid succumbing to high-pressure sales tactics.
- Beware of Red Flags: Be alert to common red flags indicating potential investment scams, such as unregistered investment products, lack of transparency, and reluctance to provide written documentation. Trust your instincts and avoid investments that raise suspicions.
- By remaining vigilant and informed, you can minimize the risk of falling victim to investment scams and protect your hard-earned money. Remember to always prioritize thorough research, seek advice from trusted professionals, and exercise caution when evaluating investment opportunities.
Romance scams
In a romance scam, the victim is persuaded to make a payment to a person they have met, often online through social media or dating websites and with whom they believe they are in a relationship.
How it could happen to you:
- You strike up a conversation with someone on social media or in a group chat. As your friendship grows, they begin requesting money, often exploiting your emotions with stories of family crises or emergencies.
- A scammer creates a fake social media profile posing as a public figure. After you engage with their posts by liking or following, they reach out to you, establishing a friendship. Once they've gained your trust, they solicit financial assistance.
- Engaging with someone on a dating site or social media platform leads nowhere when they consistently make excuses to avoid meeting in person.
How to protect yourself:
- Avoid sending money to individuals you haven't met face-to-face, especially if your interactions with them have been brief, or if they claim to be in the midst of a family crisis or urgent situation.
- Exercise caution if someone you've met online consistently avoids meeting in person or frequently provides excuses for not doing so.
- Scammers often rush to obtain money before their accounts are shut down. Be cautious of individuals who pressure you to send money hastily.
- If someone repeatedly asks for additional funds, take a moment to assess the credibility of their reasons.
- Keep in mind that celebrities and public figures typically don't establish private relationships with their social media followers and then solicit money. If you encounter such a situation, it's likely a scam.
- If you're uncertain about what action to take, seek advice from a trusted individual who can offer impartial guidance.
Advance fee scams
In both advance fee scams and fraudulent schemes, victims are persuaded to pay an upfront fee with the promise of receiving a larger payment or accessing high-value goods or services. However, in reality, the promised outcomes are never delivered, leaving the victim at a loss."
How it could happen to you:
- Job Scam: Offered a job after an interview, but asked to pay a fee for background checks or training. Later find out the job doesn't exist.
- Rental Scam: Encountered a great rental deal but couldn't view the property. Asked for a deposit to secure it, only to discover the property isn't available.
- Fake Competition: Paid to enter a competition on social media, but no prizes are ever awarded.
- Prize Scam: Contacted about winning a competition, but asked to pay a fee to claim the prize, which is never received.
- Loan Scam: Found a suitable loan but required to pay an admin fee to secure it.
- Inheritance Scam: Unexpectedly informed about inheriting money but asked to pay a fee to receive it, which is falsely claimed to be a deposit or administrative charge.
How to protect yourself:
- Research any company offering a job on social media and verify their website or office address.
- Avoid clicking links in job ads; manually type the address into your browser to ensure it's genuine.
- Never pay money to a company before starting a job.
- Use reputable estate agents and visit properties before signing rental agreements.
- Be wary of social media competitions or ads requiring payment to enter.
- Exercise caution with requests for payment of unordered goods or services, especially upfront fees.
- Verify contacts claiming to be from a company by calling back on a known, legitimate number.
- Remember, you can't win a lottery or competition you haven’t entered.
- Question anything that appears too good to be true; it often is.
Invoice scams
In invoice or mandate scams and cases where account details are altered or emails intercepted, victims intend to pay legitimate payees but are misled by criminals to redirect payments to the scammers' accounts
How it could happen to you:
- You may receive an email or invoice from a familiar company or individual, like a solicitor or trader, prompting you to make a payment. However, scammers intercept the email, alter the account details, and may urge you to pay promptly. This deceitful request might even be part of an existing email thread containing legitimate messages.
How to protect yourself:
- Always verify bank account details directly with the company via phone or in person before making any payments.
- Be cautious of emails that appear genuine; instead, confirm contact details from the company's official website or documentation.
- When making a payment to a new account, send a small sum first and verify with the company using established contact details to ensure accuracy.
- Immediately contact your bank if you suspect you've fallen victim to an invoice or mandate scam.
CEO Scams
CEO fraud occurs when a scammer impersonates the CEO or another high-ranking official of the victim's organization, persuading the victim to make an urgent payment to the scammer's account.
How it could happen to you:
- Mostly affects businesses. Criminals either access the company's email system or use spoofing software.
- They send emails to the finance team, appearing to be from the CEO.
- These emails often request changes to payment details or urgent payments to new accounts.
- CEO fraud was the least common form of APP scam in 2022, accounting for less than one percent of total cases.
How to protect yourself:
- Always verify unusual payment requests directly, preferably in person or by phone, to ensure they are legitimate. Do not rely on contact details provided in emails or letters.
- Establish documented internal procedures for requesting and authorizing payments, and be wary of any requests to deviate from these procedures.
- Exercise caution regarding unexpected emails or letters requesting urgent bank transfers, even if they seem to be from someone within your organization.
- If you suspect you may have been a victim of CEO fraud, contact your bank immediately.
Impersonation Scams: Police/Bank Staff
Scammers use various tactics, such as impersonating known individuals or organizations, to gain trust and deceive victims into sending money or valuable items. They may pose as police or bank representatives, coercing victims to make payments to controlled accounts. Additionally, they may claim to be from utility companies or government departments, fabricating fines or taxes that victims must pay. Some scams involve requesting remote access to victims' computers under the guise of resolving issues
How it could happen to you:
- You receive a message that appears to be from someone you know, asking for money. They may claim to have lost their phone and provide a new number.
- You receive a message from a delivery company, informing you of a parcel and requesting payment for arranging or rescheduling delivery.
- You receive a call, email, or text from a trusted company, urging you to make a payment. This could be framed as an urgent matter, such as an overdue bill or tax issue.
- A caller, purportedly from the police, alleges an investigation into local bank staff. They request that you withdraw cash to assist in the investigation and arrange for a courier to collect it.
- Someone contacts you, claiming to represent your bank, and insists you send in your bank card. They may offer to arrange for a courier to collect it and may deceive you into divulging your PIN during the call or request it along with your card.
- An individual impersonates your bank or law enforcement, warning you of imminent risk to your money. They advise you to transfer it to a new account to safeguard it.
How to protect yourself:
- Be cautious of unexpected money requests, especially via emails or texts, as scammers often impersonate others using these methods.
- Avoid clicking on links in unsolicited messages, particularly those prompting payments or personal information.
- If a company unexpectedly calls requesting payment, terminate the call. To verify authenticity, use a separate phone to contact the company through trusted sources like their official website.
- If uncertain about a call's legitimacy and using our app, request a notification to confirm its genuineness.
- Never disclose your PIN, especially over the phone.
- Refrain from handing your bank card, PIN, cash, or valuables to a courier. Exercise caution with anyone making such requests.
- Exercise caution if urged to withdraw and hand over large sums of cash.
- Remember that the police do not seek public assistance for investigations.
- Disregard claims insisting on transferring money for its safety, as legitimate entities wouldn't make such requests.
- Never grant remote access to your device to unanticipated callers.
- Keep in mind that authentic companies or organizations would not request payment through purchases like vouchers, jewelry, or gold.