Update on Fraud Protection

Fraudsters are getting better at tricking people into handing over their security details. Today the FOS (Financial Ombudsman Service) has asked for banks to have more protection to the victim and more help in identifying when something is wrong. They have issued Ombudsman news issue 145.

The FOS is contacted each year by hundreds of people that have scammed and then turn to their bank for help to be told they acted with “gross negligence” So what is gross negligence when you think you are speaking to your own bank? What if the phone number is showing as your banks? The email looks like it is from your bank? The banks operate an “if you are unsure, hang up” policy but why would you be unsure if it all seems legitimate.

Of course, gross negligence means the bank doesn’t have to cover the fraud and give the victim their money back so is this an easy cop out? With the evolution of technology there is a much bigger pressure on the victim to spot that the activity is fraudulent. The most common fraud is the no hang up sting. This involves the fraudster calling you and then telling you if you are unsure to call your bank to confirm, you hang up the call but they are still on the line, you then call your bank but you are not calling anyone as you are still connected to the fraudster. They then appear to be your bank and you accidently divulge all of your security details and the fraudster has enough info to access your account. How does this fall under gross negligence, you think you are talking to your bank that you called directly, however, the banks state that you have handed over secure information.

Another popular way is an email asking you to click on a link and then enter your information on what looks like your banks log on page. Another new one is actually hacking your email address and sending an email from you to your bank or financial adviser asking for money from your investment. We had one of these a few years ago and I wrote about it in a blog to highlight our extra security to combat this. Fortunately, the fraud was spotted by Richmond House and this prevented our client losing a lot of money but others are not so fortunate. A few solicitors have had their emails hacked and people have sent their home deposits directly to the fraudsters.

The FOS are trying to highlight to people what scams are out there and how to tackle the early signs of fraud, they also want the banks to be more flexible about how technology is helping the criminal more than the victim and understand that there are different types of fraud so they will need to cover more areas where the information was passed in good faith rather than gross negligence.

At Richmond House we want to make sure that any changes to your portfolio are done quickly and correctly so when you email us with a request we will check it is you by either using a secure question or a quick text/phone call. This protects all of us from fraud and the emotional/financial distress that this can cause. If you haven’t set up a secure question then talk to your financial adviser today.


Wendy Devlin Dip CII, CeFA, CeMap (MP & ER)

This information is provided strictly for general consideration only. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.