Is there a financial safety net from vishing?Posted on: 30 January 2015 by Steve Wanless
Steve Wanless warns how vishing scams and fraudsters are targetting older people online.
The dream for most investors, whether that hard-earned cash goes into property, equities, premium bonds or pensions, is to see that money grow and provide increasing financially security.
The nightmare scenario is that the investment loses value over the years, perhaps disappearing altogether.
For many investors, losses often figure larger in the decision-making process than profits. The investor himself might not realise this initially, but when questioned by an Independent Financial Adviser (IFA) about investment preferences, it emerges as a key, perhaps prime concern.
Yet recent evidence suggests that your money is never safe, even when it is deposited in your own bank account.
“A fool and his money are soon parted” is an old proverb. Unfortunately, that no longer applies. Even those supposedly financially savvy, such as a former bank manager, have recently been scammed by a process known as “vishing”.
Data from Action Fraud, the crime reporting service, has revealed that the losses from “vishing” in 2014 reached £24 million, compared to £7m in the previous year.
What is “vishing”?
Vishing is when fraudsters ring up customers and convince them they are talking to the police or their bank. Often, they will claim that the customer’s account has been compromised, telling them to transfer money immediately to a new account to prevent that money being ‘lost’.
These scammers are very sophisticated. Using specialist software, it appears the number they are calling from is the same as the number on the back of your bank card; often the fraudsters have access to your account and balance details.
The worse thing about the scam is that because the customer is authorising the transfer of money, the banks and building societies are refusing to refund the victims.
One victim had worked at NatWest as regional manager before retiring in 1997.
Clive Cooper, 72, revealed: “I am more than a little embarrassed to have been subject to a fraud of this nature, bearing in mind my 40 years of employment in the bank.”
“My sole purpose in bringing the details to your attention is that by notifying others, the fraudsters will not be as successful as in the future.”
One victim, after receiving a call on her mobile, actually rang her bank on a landline phone and was told that the “call” was probably ok as Santander often call customers if they think there is some suspicious activity.
The victim transferred £27,500 and the bank initially refused to refund the money once the scam was discovered. Fortunately, a community police officer told the victim to request a transcript of the conversation with the Santander customer services.
The transcript was enough for Santander to change its stance and all the money was refunded.
Many of the victims are pensioners. A recent study by Harvard University has revealed that our ability to make sound financial decision peaks at 53, and then declines.
It also found out that by the time we reach our 80s, half of us will have serious cognitive impairment which renders us unable to make good financial choices.
The Money Advisory Service (MAS) made a recent study that discovered that one in five over-55s could not choose the better deal from two financial products.
It is clear that, as well as being self-aware, financial institutions need to take more steps to protect its older (and more vulnerable) customers from losing vast sums of money they can ill afford.
The banks could issue a simple card to all customers, outlining what it will never ask over the phone and the best ways of dealing with the fraudsters.
Your bank will NEVER:-
- Call or email to ask you your full Pin or any online passwords.
- Send someone to your home to collect cash, bank cards or anything else.
- Ask you to authorise the transfer of funds to a new account or hand over cash.
- Ask you to carry out a ‘test transaction’ online.Send an email with a link to a website that asks you to enter your online banking details.
- Ask you to email or test your personal or banking information.
- Provide banking services through any mobile apps other than the bank’s official apps.
- Call to advise you to buy diamonds, land of any other commodities.
There are others ways of checking. If you receive a call from your bank’s fraud department, say you will phone back, and use the number on the back of your bank card – on a different phone.
Also, don’t feel that you must keep talking to someone if you are suspicious. Just hang up, waiting for five minutes for the line to clear, or use a different line – and call your bank or card issuer.
Many reading this will think: ‘How can people be so stupid and taken in so easily?’ And many victims would agree. Unfortunately, that doesn’t make the financial loss any easier to cope with.
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