Payment fraud: Millions lost in money transfer trick
02 Apr 2018

Victims of a fraud which leads them to transfer money to a con-artist are typically losing nearly £3,000 each, new figures show.

The cost of so-called authorised push payment fraud has been calculated by UK Finance, the banking trade body.

A total of £236m was lost last year, with banks unable to return nearly three-quarters (74%) of the money lost.

Victims think they are transferring money to someone official, such as a solicitor.

They often occur when people transfer money during a housing transaction, or when paying an invoice for work done on the home.

The fraudsters may have intercepted mail or hacked emails, then pose as the legitimate business by sending a payment demand.

Legal back-up

This is the first time such calculations have been made by UK Finance, showing that there were 43,875 reported cases of these scams.

Nearly nine in 10 (88%) of these were consumers, who lost an average of £2,784. The rest were businesses who lost on average of £24,355 per case.

This type of scam was the subject of a “super-complaint” made in September 2016 to regulators by consumer group Which?, which has been calling for banks to shoulder more responsibility when victims are tricked in this way.

It said these latest figures showed the “shocking scale” of these scams.

Which? made the complaint over concerns that, unlike many other payment methods, victims conned into transferring money by bank transfer to a fraudster have no legal right to get their money back from their bank.

This prompted an action plan from the Payment Systems Regulator that should pave the way for better consumer protection.

The latest figures show financial providers returned £60.8m (26%) of the authorised push payment scam losses in 2017.

How to protect yourself against “push” fraud

When you transfer money from your bank account, you are asked to enter three pieces of information: the name of the payee, their account number, and the sort code.

However, only the last two are cross-checked by the bank. So putting in the correct name is no guarantee that person will get the money.


Read more:

UK: Gang laundered cash from fraud victims through bank accounts

Chinese money launderers paid £1.8m into London banks

Banker, trader helped Iran evade sanctions – how blacklisted governments launder billions

You can claim CPD minutes for this content, by signing up to our CPD Wallet


You must be logged in to post a comment.

This site uses Akismet to reduce spam. Learn how your comment data is processed.