How to avoid telephone banking scams

tori smith
By Tori Smith

credit card security

"I received a call from someone claiming to be from my bank and gave out my financial details. Now I'm worried it's a scam. What can I do?"

You have every right to be worried because, sadly, telephone banking scams are on the rise and more sophisticated than ever.

In June 2013, the National Fraud Authority (NFA) estimated that telephone banking fraud will cost UK consumers £13 million this year.

If you suspect you've been hit by fraud we've got a guide on what to do and how much your bank will refund here.

This guide will look at the superior option: avoiding these telephone banking scams in the first place.

Read on for the most common approaches used by criminals and practical advice on staying safe.


Calls purporting to be from authority figures aren't a new kind of telephone banking scam but, re-dubbed 'vishing', they have seen a revival in recent months.

Also known as 'vishing' this type of scam involves a fraudster posing as a bank employee, police officer or other member of a legitimate organisation.

How it works

They contact the individual claiming to be investigating a fraudulent transaction on their account and attempt to obtain the individual's security or financial details in the process.

So far this year over £7 million has been lost through vishing scams, according to Financial Fraud Action UK.

The same research found 25% of people had been called by someone requesting the disclosure of personal or financial information.

How to stop it

Taking some simple and sensible precautions can safeguard against vishing scams.

The bank or the police will never call and request you to disclose personal financial details, especially PIN numbers.

If a call is suspicious put the phone down and ring the caller back. Legitimate organisations will have no problem giving out a direct telephone number.

Double caution on call back

However, as consumers have become more suspicious, fraudsters have become increasingly good at getting around the call back method.

Double check numbers you're given to call back on or call through the main customer care number for the organisation and ask to be put through.

If you decide to ring back and verify the call it is advisable to do so on a different phone line like another landline or your mobile.

If this isn't possible leave at least 5 minutes between receiving the suspect call and making a new call.

Some scammers keep the phone line open and will reconnect as soon as you dial a new number, continuing the scam by pretending to be a different person from the same organisation.

Courier scams

Courier scams are so elaborate victims don't realise they are being defrauded until it's too late.

How it works

Just like the previous scam, a fraudster usually poses as a representative from the bank.

The victim is informed their card has been used to make fraudulent transactions or that it is has expired and needs to be replaced.

The caller asks the victim to key in their PIN on the phone's handset to activate a replacement card - crucially obtaining one half of the victim's card details - then arranges for a 'courier' to collect the card from the victim's home and replace it with a replacement card, which is a fake.

When the victim hands over the real card in good faith the fraudster possesses both the PIN and card to commit fraud.

How to stop it

The safety precautions described above also apply to this scam but courier fraud has other problems.

Giving away a PIN

By disclosing their PIN to the scammer a victim of courier fraud may not be entitled to any financial compensation for losses accrued as a result of the fraudulent transactions that follow.

Although they have to prove it, banks may allege that the victim of the fraud was either complicit in the fraud or negligent in revealing their PIN.

For this reason be even more careful: if you receive a call requesting you to reveal your PIN number end the call immediately and contact your bank or the police, preferably using a different phone line.

Send couriers back

If it gets to the point that you're standing on the doorstep face-to-face with the courier and you have reservations it's not too late to stop the scam. Just refuse to hand over the card and close the door.

If a card has really been used for fraudulent transactions banks deactivate it remotely and ask the cardholder to dispose of it safely, if it's still in their possession.

In other words, banks will never ask cardholders to hand their cards back to them. Be suspicious of those that tell you otherwise.

Bank staff fraud

It may come as a surprise, but telephone banking fraud involving genuine bank employees is on the increase.

According to CIFAS figures 2012 saw a 43% rise in fraud against customers, with three quarters of reported cases involving UK bank employees.

Greed, debt and money problems can all drive bank employees to commit fraud against their customers, the report found.

The desire to recruit highly sales focused individuals is also believed to have undermined the vetting process, with banks preferring to hire and fire at will than invest in long-term relationships with their employees.

And some critics say banks are too focused on catching 'external' criminals to notice the fraud going on under their noses.

How it works

The aim of bank staff fraud is exactly the same as any other telephone banking fraud. Bank staff fraud also attempts to obtain a customer's personal and financial details to commit fraud.

The difference between bank staff fraud and the other types of fraud we've discussed is that it's almost impossible to spot until it's too late.

Telephone banking has become increasingly automated in recent years and much of the security verification process is done this way.

For instance, it's quite normal to be asked to identify yourself by keying in your date of birth, your sort code or the last four digits of your card.

Most banks set up customers with a telephone banking 'passcode' from which a customer provides certain digits when prompted by the automated system.

The only difference is that the staff member is scribbling those details down, rather than putting them into the system.

How to stop it

If you speak to a call handler and they ask you to reveal certain information, such as your PIN or your entire passcode, alarm bells should ring.

Honest bank staff will never ask you to reveal this information.

On the other hand, bank staff fraud is hard to spot because the call is usually initiated by the customer and security questions are the norm.

However, if you 'feel' something is not quite right during the conversation or you're uncomfortable revealing information to the call handler then don't.

End the call and call back and contact the bank or visit your local branch to voice your concerns.

Stay safe: top tips

To recap the above:

Think you're a victim of fraud?

Report your suspicions to your bank: They will check your account immediately and take action should anything be amiss.

Alternatively, contact your local police station or get in touch with Action Fraud on 0300 123 2040 as soon as possible.

Don't panic: Banks are sympathetic to the victims of fraud and will do all they can to help you.

They understand the great lengths fraudsters go to win the trust of their victims and, even if you have accidentally given out your PIN or handed over your card, they will do everything in their power to help you recoup any financial losses.

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