Customers conned out of €8k in new direct debit scam

Victims are persuaded into transferring their money to a so-called ‘safe account’ in order to protect it

FraudSMART said that victims are asked to open their banking app or desktop account while on a call, set up a new payee or ‘safe account’ using an IBAN provided by the fraudster and transfer their money into this new account, which the fraudster controls.

Customers are being conned out of between €6,000 and €8,000 in a new ‘direct debit’ scam which convinces victims that their bank account has been hacked.

Victims are then persuaded into transferring money to a so-called ‘safe account’ in order to protect it, according to the fraud awareness initiative, FraudSMART.

On the back of this new scam, consumers are now being warned to be extra vigilant of unsolicited text messages and phone calls. They are also being reminded that banks will never ask customers to transfer funds in order to keep their accounts safe.

Niamh Davenport, Head of Financial Crime at the Banking and Payments Federation of Ireland, described it as a “very recent scam”, and said cases are beginning to rise with customers, on average, being conned out of between €6,000 and €8,000.

The scam

Outlining how the scam works, Ms Davenport said: “The scam is particularly deceptive and unfolds through a number of convincing text messages and phone calls.

“Victims initially receive a text message impersonating their bank, falsely alerting them to a ‘new’ direct debit that has been set up on their bank account.

“The text message advises that if they didn’t set up this direct debit, they should call the phone number in the text message immediately.

“This mimics the style of legitimate messages we might expect from banks or service providers when changes are made to our accounts, making it seem more convincing.

However, banks will never include phone numbers for customers to ring within a text message.

But if the customer falls for the scam, and calls the number in the text message, they then end up speaking directly to the fraudster. Customers are then advised that their account is at risk and, in order to protect their money, they have to transfer their funds and close their account.

Victims are then asked to open their banking app or desktop account while on the call, set up a new payee or ‘safe account’ using an IBAN provided by the fraudster and transfer their money into this new account, which the fraudster controls.

This is often followed by a text message ‘confirming’ that the new IBAN will be processed in 24 hours, along with details of the amount transferred and a fake ‘lodgement reference’, in order to further persuade the victim that it is legitimate and also delay detection.

'Social engineering'

According to Ms Davenport, “these fraudsters can be very skilled at convincing people and gaining trust.” 

“They use a variety of psychological techniques known as ‘social engineering’, so it’s possible for any of us to be caught out if we’re not on alert,” she said.

She warned customers to be “very cautious” of unexpected texts or phone calls.

“If in any doubt, ignore the text message or hang up the call, and phone your bank immediately using the number on the back of your bank card,” she concluded.