Scammers try to convince people to ignore “no match” warnings when the bank account they’re transferring money to doesn’t match the name of the person they think they’re paying, according to a regulator.
The payments systems regulator (PSR) said it expects to see more action from financial institutions to stop scams where people are tricked into transferring money to a fraudster and to better protect and reimburse people if they are victims.
Recent figures show that in the first half of 2021, £ 355million was lost to authorized push payment (APP) scams where people were tricked into paying criminals directly.
And as Christmas approaches, rumors of another foreclosure refuse to go away, forcing many to consider giving money via bank transfer this year rather than an in-person gift to family and friends.
Some banks have introduced an extra layer of protection for customers called Payee Confirmation – which tells people making payments if the account they’re trying to pay into matches the name of the person they think they’re paying.
Besides protecting against fraud, it can help prevent people from accidentally paying money to the wrong bank account.
PSR said there were now more than a million beneficiary confirmation requests every day.
But in a document posted on its website, PSR said it was informed following a call for comment: “There has been an increase in the social engineering of victims by fraudsters to convince customers to ignore “no match” warnings.
“In some cases, scammers can even use the added level of trust offered by (recipient confirmation) to manipulate victims into sending money to mule accounts.”
Money mules allow criminals to use their accounts to launder money.
Some customers may also go ahead due to “click fatigue” or a lack of knowledge on how to interpret warnings, it has also been suggested.
Overall, the PSR said the evidence for the positive impact of payee confirmation is a compelling case for a wider roll-out, which will provide consumers with better protection against fraud, prevent accidental payments. misdirected and will offer greater protection to the sector.
He said he shared his concerns that some scams continue even after a “no match” warning.
But he said his analysis showed a continued decrease in the number and value of scams that have taken place after such a warning.
He said: “This suggests that (recipient confirmation) may lead to more customers relying on warnings and abandoning potentially fraudulent transactions.
“So it is clear to us that there is a strong case for a wider deployment of (recipient confirmation).”
PSR also said the comments suggested a shift in scams migrating to institutions that have yet to implement beneficiary confirmation.
Chris Hemsley, Managing Director of PSR, said: “Recipient confirmation has proven to be an effective way to prevent scams from happening, but it should be widely available – we want to see more banks, mortgage and financial institutions use this service. to protect their customers. “
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He added: “The ongoing work to expand the (payee confirmation) service will mean that many more fraudulent and misdirected payments should be avoided.
“Good progress is currently being made in making the service more widely available, but we will intervene if necessary, including if we believe progress is stagnating. “
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