Common APP Fraud Impersonation Scams & Tips to Avoid Them

A man was buying a house and, as the completion date approached, he received an email from his conveyancing firm with details of where to pay the deposit. What he didn’t realise was that a scammer had intercepted the emails between himself and his solicitor and was sending messages from the solicitor’s account.

Although the law firm was the man’s family solicitor for many years, the name on the bank account differed from the firm’s name, which unfortunately went unnoticed. The man’s bank, HSBC, had a daily transfer limit, so he had to make a total of 9 payments; however, the bank did not question the out of character transactions. The funds were directed into the scammer’s bank account, leaving the man £240,000 out of pocket.

This is known as Conveyancing or ‘Friday afternoon’ Fraud, and is a type of Impersonation Fraud. It can be extremely difficult, if not impossible, to detect, and the victim may not even realise that they have been scammed until some time afterwards, for example, when the solicitors’ firm opens again on Monday.

In this example, the scammer pretended to be the solicitor and sent emails from his actual account. In another case, a couple was purchasing a new house and needed to pay over £300,000 to their solicitor. A new email address was set up by the scammer, with only one letter different from the genuine address, and the header, footer and contact information all appeared genuine. The scammer intercepted genuine emails from the solicitors’ firm and sent the couple fake email updates about the property purchase from the new address.

The couple were asked to transfer the deposit just before the firm closed for the Christmas holidays and, since it was such a large amount, they carried out the transaction in-branch. The Clydesdale Bank denied responsibility for their loss when the scam was discovered in the New Year, saying that they had signed a form to confirm the payee details were correct and another fraud prevention warning to confirm they were happy to authorise the payment.

TOP TIP: If you are transferring money online for such an important purchase, double-check that the information you have been given is correct – contact the firm directly using the 159 service or a telephone number on the firm’s website. Confirm the account name, sort code and account number they wish you to use. The 159 service operates in the same way as 101 for the police or 111 for the NHS. It is described as:

“It’s the number you can trust to get you through to your bank safely and securely, every time.”

One businesswoman lost nearly £5000 in a text message scam. She received the message claiming to be from her bank, Halifax, highlighting an unusual transaction on her account. The message asked her to contact the bank and gave a telephone number, which she dialled. The call was answered in the same way Halifax normally did, and the hold music was the same.

She spoke to an adviser who said that her account had been compromised and would have to be closed, and he would help her set up another account. The lady was also asked to move money from accounts with Chase and Barclays banks, as well as Halifax, into the ‘safe’ account. She did as he asked, using internet banking and, only when the man became annoyed with her, did she start to suspect something wasn’t right. The lady ended the call and contacted her banks but was successful in recovering only some of the lost amount.

TOP TIP: Banks will never ask you to move money to a ‘safe account’. This is a tactic commonly used by fraudsters, as they are able to set up a new account, be in full control of it and move the money elsewhere, with ease. Report scam texts and calls to 7726, the free service available to UK mobile phone users.

“When you’ve done this, it alerts your mobile provider to investigate the number and potentially block it, if it’s found to be a nuisance.”

Authorised Push Payment (APP) Fraud is the umbrella term for any fraud or scam where the victim is persuaded to transfer money to a scammer, believing the transaction to be genuine and for a legitimate purpose.

APP fraud is so prevalent that banks have had to do more to try and prevent it from happening in the first place. They have systems in place that monitor transactions and can delay or block payments they believe might be fraudulent.

Banks should:

• Monitor accounts, particularly if the customer is vulnerable to fraud or scams.
• Provide warnings to customers via online and mobile banking to highlight scam tactics.
• Detect suspicious activity and delay or stop payments until they have been investigated.
• Contact the customer directly to find out more if transaction activity is suspicious.
• Use industry intelligence to stop accounts being set up for the purpose of scams, money laundering, or to finance terrorism.

There is currently a Contingent Reimbursement Model (CRM) Code, which banks sign up to voluntarily. Under the CRM code, banks agree to protect their customers by detecting, preventing, and responding to APP scams and by reimbursing customers who have lost money to unscrupulous scammers. If the bank can’t show a scam victim was unduly negligent, they should refund the lost money.

Not all banks have signed up to the Contingent Reimbursement Model (CRM) Code. Even those that have may refuse to refund money lost to scammers, as in the cases highlighted above. If your bank did not do enough to prevent you losing money to a scam, it is possible to take your complaint to the Financial Ombudsman Service (FOS), the financial industry’s independent investigator, whose role is to settle disputes between banks and their customers and frequently adjudicate on cases of Bank Negligence.

Trying to get your money back after being scammed can be complicated and time-consuming. There are claims and appeals processes, time limits to follow and financial and legal jargon to navigate.

The specialist fraud team at TLW Solicitors is helping many clients recover refunds on a ‘no-win, no-fee’ basis. If you have a claim, we will deal with your claim from start to finish whilst keeping you up to date as the case progresses. You only pay us if your claim is successful.

Sarah Spruce, Head of Professional Negligence Claims at TLW Solicitors says:

“We have had success for clients whose initial cases were rejected by FOS. For example, one of our clients received £12,500 following an impersonation scam that had been refused by her bank and then FOS. Our experienced team were able to identify additional information and factors that she had not submitted to FOS, and the whole case was reconsidered, this time in her favour.”