Fraud against bank accounts was the most common type of fraud recorded during the first four months of 2014 by organisations that share data through CIFAS. That’s the UK trade body for banks and others in the financial services sector.
Not only has bank account fraud risen compared with the same period of 2013, but the scale of some types of fraud – in particular the fraudulent misuse of an account – underlines that consumers must be more aware of the legal consequences the fraudulent use of their accounts, says the trade body.
As CIFAS points out the bank account lies at the heart of most financial lives and the ability to obtain other services (credit cards, mortgages, phone contracts) may well depend on having a bank account. Hence, the reason why frauds target such products.
The increase in bank account fraud (up 48 per cent from the first four months of 2013) was driven by a shocking 54pc increase in the fraudulent misuse of bank accounts. Over half of all misuse of bank account frauds related to someone allowing his/her account to receive false, fraudulent or criminal funds – often a fraud with links to other forms of organised criminality (such as money laundering). Organised criminals have long been known to target those who are short of money (such as students or the unemployed) and the trade body suggests that some people’s financial situation influenced their decision to allow their accounts to receive stolen funds. It’s a criminal offence: and the bank may withdraw bank account services from the account holder.
Simon Dukes, CIFAS Chief Executive, says: “Banks are legally obliged to report and shut down accounts that are used to transfer criminal funds – in order to prevent money simply being transferred elsewhere to fund other criminality. As a result, organised criminals are known to recruit people as ‘money mules’. What these figures demonstrate is that the message needs to be repeated: under no circumstances must you allow your account to be used to receive and send funds from or to people you do not know. These figures also underline the need for financial institutions to continue to promote this message to customers, especially those – like students – who might be particularly vulnerable. In the same way that most individuals now recognise the need to safeguard their online account details so as not to be hacked, they need to be aware that there can be serious and lasting repercussions from allowing an account to receive stolen or fraudulently obtained funds, including withdrawal of accounts, exclusion from obtaining a new account, and even a criminal record.”
Visit: www.cifas.org.uk/bankmisusefraud.
