Fraudsters are using a cruel new scam to exploit trust between family members and close friends – and rob them of tens of thousands of pounds.
Santander, HSBC, Barclays and NatWest all confirm that they have seen cases of the new bank fraud and are warning customers to be on their guard.
The scam starts when a fraudster contacts their victim – usually by phone, although it can also be by text message, email or via social media.
Lurking in the shadows: The money disappears and the fraudster cannot be contacted – or even traced – again
The scammer pretends they are getting in touch from the victim’s bank, the police, National Crime Agency or other official body. Then the conman falsely warns their victim that their bank account has been compromised and that it is now dangerous to use their own name and personal details to set up a new account. They tell them that a ‘safe’ account will have to be set up in a different name.
The victim dutifully moves their money to a family or trusted friend’s account. But after a few days, the fraudster then gets back in touch with the victim and informs them that a new bank account has been set up on their behalf and it is safe for their trusted loved one to transfer the money into it.
Therefore if the victim’s loved one receives a notification from their own bank that the new account details given do not match up with the name of the victim, they are unfazed and agree to authorise the payment.
Sadly, the safe account is nothing of the sort. In fact, it is simply an account owned by the fraudster. Once transferred out of the loved one’s account, the money disappears and the fraudster cannot be contacted – or even traced – again.
Chris Ainsley, head of fraud control at Santander, says ‘Friends and family safe account scams are a particular menace. Once scammers have got hold of your details – often through a fake text message such as from a delivery service – they target their victims, and put them under great levels of stress, pressurising them to act quickly.
‘By getting customers to transfer to a friend or family member in the first instance, it gives scammers more time to set up an account to receive the money back into – and also helps to lull victims into a false sense of security. That is, that their money is being guarded by a friend before it is sent to the new account.’
Involving friends and family members means that victims are more likely to let their guard down.
First, the victim gets used to the idea of moving all of their money; having moved it once between their own account and that of a loved one, it is not so much of a leap to transfer it again into a so-called ‘safe’ account.
Secondly, the scam is less likely to be spotted by the banks. Transfers between friends and family members are unlikely to raise a red flag in bank fraud departments because such transfers between people who know each other are common.
And thirdly, the second transfer is made by the family member, not the scam victim. Since it is not their own money and they simply believe they are helping someone out, they are less likely to be wary of transferring the funds to a new account. Santander reveals it has even seen cases where the trusted family member is then advised that their account has been compromised too and their money must be moved into the new, safe account. In this way, two members of the same family can lose all of their money.
The latest scam is one of a number of different ploys that manipulate the trust between family members and loved ones. Even people who believe they could never fall for a scam because they would not trust a stranger may fall victim because they are deceived into thinking they are relying on someone they already know and trust.
Santander has also seen a spike in the number of WhatsApp scam cases using this technique.
Here, the victim receives a message through phone messaging service WhatsApp, sent from a new number. The message will say something along the lines of: ‘Hi mum, I’ve lost my phone – this is my new number’. However, the message will not be from a son or daughter, but from a scammer pretending to be them.
The scammer may keep up the pretence for days or even weeks, maintaining a WhatsApp conversation with the victim and gaining their trust.
That is until one day, when the scammer will ask the victim for money and provide bank details for it to be paid into. The money request – which the victim still believes is coming from their loved one – may be asked for to pay off a loan, tide them over until pay day, or even to pay for medical treatment.
Once the payment has been made, the fraudster stops making contact with their victim and is nigh impossible to trace.
In many instances, the scammer’s target will cotton on before they hand over any money. The scammer may use language that their loved one would never use – for example calling them ‘mummy’ when their real son or daughter would never refer to them that way.
But scammers will be preying on several victims at one time, waiting for one of them to bite.
Sarah Wood, a fraud expert at Santander, says: ‘We have seen cases where the victim grew wary because there was something not quite right about the language in the messages they were receiving. They messaged back saying: ‘I think you’re a scammer’.
The scammer brazenly responded: ‘Fine, I’ll just try someone else then’ – and ceased contact.
Five of most dangerous scams to be aware of now
1) Energy bills racket
Last month, to help with soaring fuel bills, Chancellor Rishi Sunak announced a £400 discount on energy bills for everyone, and a one-off payment of £300 for pensioners who receive the winter fuel payment.
Both will be applied automatically, but already scammers are targeting victims with text messages or emails asking them to fill out personal information so ‘payments can be processed’.
This information can then be used by conmen to trick them into parting with their cash.
2) Council tax rebate
Ruse most households are due to receive a £150 council tax rebate to help with the cost-of-living crisis. But scammers are exploiting confusion over how these payments work by contacting victims and telling them to hand over personal and bank details so payments can be made.
3) Scams exploiting war in Ukraine
Scammers are sending out text messages and emails claiming to be from charities helping Ukrainian refugees. Victims make payments that they think are going towards a good cause, when in fact they are going directly to scammers.
4) Investment frauds
Conmen exploit the fact that there are millions of desperate savers who are trying to shield their nest eggs from low savings rates, rising inflation and poor financial returns.
Many scammers seek to take advantage of this by offering realistic-sounding investments, such as bonds or ‘risk-free’ cryptocurrency products. But once the victims move their money into what they believe are investments, it disappears and quickly becomes untraceable.
Such scammers often clone the details of big investment firms, giving the air of authenticity.
5) Holiday cheats
Victims believe they are booking genuine accommodation or flights, when in reality they are simply handing over their money to fraudsters. Fraudsters will clone travel websites to make them appear genuine, and list accommodation on booking platforms that does not exist.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.