Nearly half (48%) of people in the UK incorrectly believe they are protected by their bank from authorised transfer fraud, according to the Shieldpay Fraud Tracker.
The research from Shieldpay, the secure payments provider, also reveals a further two in five (38%) people do not know how or if they are protected from this type of scam. Of the people that incorrectly believe they are protected; 13% think they are fully protected by their bank, 13% believe it is at their bank’s discretion as to how much they will protect and 22% think they are protected up to a certain limit. Just 8% of people know that they are not protected at all, with banks having no legal obligation to recover funds on behalf of its customers.
Authorised transfer fraud happens when someone is tricked into moving money from their own bank account directly into that of a fraudster. UK Finance data on authorised transfer fraud shows there were 34,128 cases and total losses of £145.4 million in H1 2018. Even though banks are not legally obliged to recover the money they do attempt to recover the money in some cases – £30.9 million was returned to the customer.
Despite misunderstanding what protection banks do provide, the majority of people (43%) do believe they are responsible for ensuring a person or company is legitimate when making payments online.
People are also aware of the risks associated with transferring money directly to a seller. Nearly half (49%) of consumers have been put off from buying an item online because the buyer wanted them to transfer the money directly into their account, 15% bought the item anyway, while 34% did not go ahead with the purchase. Worryingly, despite the risks, 51% would not be put off from making a transfer in this way.
Tom Clementson, Director of Consumer & SMB, at Shieldpay: “There is clearly confusion amongst consumers about the protection they receive from their bank against authorised transfer fraud. More needs to be done to raise awareness of the risks associated with transferring money directly to someone you don’t know. While banks do a great deal to protect their customers people should not solely rely on them to protect them when buying and selling online.”
“Before entering into any transaction online people should consider a way to do this safely and securely. At Shieldpay we have developed a secure payment solution, that allows people to pay anyone, anywhere with total confidence.”
Shieldpay’s tips on how to protect yourself from authorised transfer fraud:
- Be aware who you’re sharing your personal information with
- A legitimate business won’t ever ask you to reveal your PIN, password or account details on the spot.
- Only give out details to a service you trust and that you’ve contacted directly or are expecting to be contacted by. If in doubt, don’t be afraid to say you’ll get back to them, and use the official phone number or email address as listed on their official website.
- Don’t click on links in unexpected emails or texts
- Be careful not to automatically click on a link in an email or text that you don’t expect to receive. It might well be a scam. When logging onto a website, make sure you look at the address bar and see a lock – this tells you that your connection is secure. If a website doesn’t have this lock icon – your connection isn’t secure, and it’s best not to share any sensitive information.
- Don’t be rushed or pressured to make a payment
- Under no circumstances will a legitimate or trusted organisation force you to make a financial transaction on the spot, the same goes for genuine sellers of the likes of eBay or Gumtree. Remember to stop and take time to carefully consider your actions.
- Listen to your instincts and follow your gut
- If something feels wrong, then don’t be afraid to question the situation. Follow your gut. Fraudsters will try and lull you into a false sense of security. While they might appear trustworthy at first, they may not always be who they claim to be.
- Stay in control of your money, and report anything suspicious
- If you’re worried that you may be at risk, report it to the Police or Action Fraud straight away, who can help you, or register the incident with CIFAS – the national fraud database, who can help protect you. The best way to stay safe is to always use a secure way to pay, like Shieldpay.
- Stick it in the vault, release when happy
- We built Shieldpay so that you can have total confidence when dealing with anyone, anywhere. We verify the identity of all parties in any transaction, so you know they are who they say they are. Your money is held securely in the Shieldpay vault, and only released when you agree you’re happy with the exchange of goods or services, to protect you against APP scams and fraudsters. In the event that anything does go wrong, we’re here to help you out with any disputes.