A new report is warning people to be on their guard against so-called 'vishing' scams, because most victims who end up with the Ombudsman are told that their bank has no duty to repay a penny of the stolen money.
In a vishing scam, fraudsters will call and use a number of techniques to get you to transfer money from your account into another account - which is actually held in their name.
The Ombudsman issued the report after it looked at 200 cases of this fraud, in which people had lost anything up to £100,000 each. It discovered that in 37% of cases the Ombudsman had decided that the individual was to blame for the fraud, and so the bank had no duty to compensate them for their loss.
The banks don't have a blanket policy towards vishing: they will look into the specifics of your case, but in most cases, many thousands of pounds will be gone for good.
Almost two fifths of people in the study lost between £5,000 and £14,999, while one in five lost between £20,000 and £49,999 - and some lost more than £100,000.
Caroline Abrahams, Charity Director at Age UK says: "That anyone would target an older person to defraud them in the first place is abhorrent but we know that older people are deliberately targeted and can be especially at risk if they are living with dementia or cognitive decline. Some older people are more vulnerable to fraud because they live alone or in isolation, but fraud is something that can happen to any of us."
It sounds fanciful to suggest that you could be persuaded to transfer all your money into someone else's account, but these criminals are very convincing. Abrahams says: "The degree of sophistication used over the phone or online to defraud is frightening."
In vishing scams the fraudsters say they are from the bank or from the police. They say that your account has been compromised, so they have set up a new account for you, where your money will be safe. They then convince you to transfer the money into that account - which of course belongs to the criminals.
As another stage in convincing victims, they may call and say they are from the police, and tell you to phone your bank immediately. You hang up and dial the number of your bank. They, however, stay on the line, so that instead of calling your bank, you remain on the phone to the criminal. This is known as the 'no hang up' scam.
Fortunately, you can protect yourself by remembering a few simple rules. Many of the techniques these fraudsters use involve them doing things that your bank would never do, so bear in mind that your bank will never ask you to transfer money to a new account, or hand over cash. They won't ask for your PIN or password in full either over the phone or by email. Neither will they ever send someone round to collect cards or cash. Your bank will never ask you to complete a test transaction online or send personal banking information by email or text.
You can protect yourself by never handing over personal details on a call. If you're in any doubt about the identity of a caller claiming to be from your bank or the police, hang up and call the phone number on your account statements, back of your debit or credit card, in the phone book, or on the company's website. Use a different phone or wait at least five minutes before making the call to make sure you're not speaking to the same fraudsters.
The Ombudsman adds: "Remember, if your bank suspects your account has been compromised by fraudsters they will usually 'freeze the account' which will prevent any transactions happening – there is no need for you to do anything."
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