How to avoid banking fraud
By: Tim Bennett
Don’t join the long list of people who have been scammed by banking fraudsters, warns Tim Bennett in his latest short video.

How to avoid banking fraud

Banking scams are more common than ever. So, what should you look out for and what can you do to avoid becoming the next victim?


Complacency is the friend of the fraudster and probably helps to explain why 80,000 people were successfully defrauded in 2018, according to the BBA. In short, we simply don’t believe it will happen to us.
Part of the problem may be that people assume that they will be automatically compensated if they are scammed. But whilst that may be true, eventually, the reality is that there is no universal scheme yet in place and therefore each bank runs a slightly different process to its peers.

The compensation challenge

If a bank goes bust holding your deposits, then you are protected up to a fixed limit by the Financial Services Compensation Scheme. However, if you are targeted successfully by a fraudster, you will be faced with going through each organisation’s specific claims process, which can be administratively time consuming and stressful until you get your money back. That’s because, so far at least, the banks have failed to agree on an alternative.

How frauds happen

So, how are so many people still being caught out? The answer lies in the fact that there are lots of ways for someone to try and obtain your bank details and/or access to your account. Here are six of the more common ones to guard against;

Fake HMRC emails are particularly common in the run-up to the end of the tax year. A typical approach is to ask you to supply personal details in order to claim a refund from a bogus retailer or someone passing themselves off as a genuine one.
Around Christmas time, failed transaction notifications are a favourite from someone claiming to represent a retailer you may have shopped with. Again, the objective is to get you to give away important personal details and bank account or card information. If you ever receive these to, say, a Hotmail account, an obvious giveaway is an overly long and complicated URL.

What can you do?

Many of the practical steps you should take to reduce the likelihood of being scammed fall into the “common sense” category.

Online security

With many of us banking online these days, the challenge is often to keep on top of the huge number of login details, passwords and security questions you will be asked to create and keep. Fortunately, some help is available for anyone who is struggling to stay on top of multiple accounts with different providers in the form of password management services. An alterative is to regularly consolidate old accounts (where perhaps an initial deal has expired) so that you are not overwhelmed with information to be remembered and/or securely stored. Either way, don’t forget to regularly update security information.
Feel free to email me on [email protected] or contact an Adviser to discuss any of the issues raised here in more detail.