Scamwatch: the fraudulent text messages that could cost you thousands of pounds

Stay one step ahead of the fraudsters with our series of articles giving you the lowdown on the scams they use to trick people out of their hard-earned cash - and how to avoid being taken in by them.

This week, we explain how a clever smishing, or SMS, scam is being used to steal thousands from Santander customers.

How does it work?

Smishing fraud involves the sending out of text messages designed to trick people into handing over personal details.

Santander, whose customers are known to have lost at least £36,000 in the last month alone to fraud of this kind, is a popular target for smishing fraudsters due to high current account interest rates that encourage people to have larger balances.

The criminals behind the current version of the fraud use a sneaky technique called number spoofing to make the text messages, which claim to be from internal fraud prevention teams reporting unusual activity on the recipient's account, appear on an existing thread of genuine messages from the bank.

However, when people call the number in the text message to find out more, they are tricked into giving the fraudsters access to their accounts online.

How can I avoid being caught out?

Santander is refusing to compensate customers taken in by this scam because they were conned into giving the criminals a security code, or One-Time Password, sent to their mobile phones by the bank.

So to avoid losing out, the lesson here is to always refuse to disclose your passwords and PINs - no matter what the person on the other end of the phone says.

It's also worth checking that any numbers quoted in unsolicited emails, text messages or calls are genuine before using them.

Santander is urging customers to always use the phone number on the back of their debit or credit card, or the usual website address, to call the bank.

I've been defrauded. What should I do?

You may be able to prevent, or limit, smishing fraud losses by contacting your bank as soon as possible to secure your accounts and try to block any transactions.

Anyone who has fallen victim to smishing fraudsters should also report the crime to Action Fraud (0300 123 2040).