Watch out for this financial fraud scheme

Financial fraud is a significant global problem, and fraudsters are becoming more and more sophisticated. It's possible for anyone to fall victim, so it's important to know how to defend yourself.

In this video, financial journalist PAUL LEWIS outlines one particularly common type of fraud, whereby criminals pose as the very authorities claiming to protect peoples' money.

He explains the signs that people need to keep their eyes open for, as well as the many precautions we can take to protect ourselves from criminal threats.


Robin Powell:
All around the world, financial fraud is on the increase. Banks, police forces and governments are all trying to combat it; but the fraudsters are becoming increasingly sophisticated. Here’s the financial journalist and broadcaster Paul Lewis.

Paul Lewis: Financial fraud – or theft as I like to call it, because that’s what it is – is huge. Fraud itself, if you take all fraud, it’s 40% of all crime. It’s the crime you are most likely to come across: far more likely than burglary, or assault, or anything like that. Fraud is the thing that is the biggest crime of all.

RP: One of the most common types of fraud is called APP (or Automated Push Payment) fraud. It entails tricking you into authorising a payment to an account controlled by criminals. Here’s how it works.

PL: A criminal rings you up. They pretend to be from your bank, or from the police, or possibly from a broadband provider and they say, “There’s a real problem with something going on in your broadband or your bank. We think there are people trying to steal from you,” – which is true, it’s them – “and we want to keep your money safe! So move your money to this new account we’re going to set up for you, and then that will keep your money safe.” And of course, that account is controlled by them. They are very sophisticated – they are very, very clever criminals.

RP: Now, you might be thinking, “I would never fall for a scam like that.” But don’t be so sure. Paul Lewis says that fraudsters can fool the most unlikely people.

PL: I’ve known who have been cautious all their lives – very well-educated people, very financially astute people – who have been conned by these psychological crimes. It’s psychological warfare, really: they groom you into thinking your money is at risk, that makes you frightened, they then move it to somewhere else and you think that it’s safe. But everyone I’ve ever talked to: once the crime is over and their money’s gone and before they even find that out, they think to themselves, “I’m not quite sure about that now”. But it’s too late. You’ve already given the person the information they need to rob you.

RP: So, how do you protect yourself from this type of fraud? You actually have a very powerful weapon against it. You just have to remember to use it.

PL: We all carry with us the one thing that can stop fraud completely. It’s our finger. As soon as someone rings up – cold, you don’t know who they are – and says your money is at risk, press “end call”. If it’s a text, delete it. That finger can save you. It’s like a castle wall around you. You can just stop the crime in its tracks. Never engage with them! Because they know the pattern, they know how to get this information from you. And the moment you engage, you’re already in their dark world – and that is the real danger.

RP: There are other things you can do to protect yourself from fraud. For example, always choose passwords that are hard to guess. Also, use two factor authentication, which requires two methods to verify your identity. But most of all, don’t be complacent. Everyone’s at risk from financial fraud, including you.