How to avoid telephone banking scams

Last updated: 9 May 2022   By Dr Lucy Brown, Editor

Fraudsters can use telephone scams to trick people out of their money.

Telephone scams may encourage customers to transfer money to a so-called safe account or pay for goods that don't exist.

Meanwhile, telephone banking fraud remains a presence in the UK, with unauthorised remote fraud stealing £16.1m in 2020 alone.

The best way to avoid telephone fraud is to stay vigilant and hang up if you ever feel that a call may not be genuine.

credit card telephone
Credit: Andrey_Popov/

Types of telephone scams

A telephone scam takes place when someone persuades customers to transfer money over the phone or provide personal details

Authorised push payments

Authorised push payment (APP) is an umbrella term for various scams that encourage customers to transfer money from their bank to another location. They are also known as bank transfer scams.

While these scams can also take place online, telephone APP scams can include the following:

  • Purchase scams - A victim pays for goods or services that are never received
  • Investment scams - A victim is persuaded to move money to a fake fund or to pay for a fake investment
  • Romance scams - A victim is persuaded to pay money to someone them have never met and who they believe they are in a relationship with
  • Advance fee scams - A victim pays a fee after being persuaded they will get a larger payment or high value goods
  • Impersonation scams - A victim is contacted by someone purporting to be a member of the police, a bank employee or other person in authority to make a payment to a safe account

To make the scams more credible, fraudsters sometimes use spoofed phone IDs to appear as though they are calling from a legitimate business.

APP frauds can be costly, with some victims being tricked out of thousands of pounds.

Data from UK Finance found £479m was lost to APP fraud in 2020, an increase of 5% on the year before. While this was a combined figure including telephone, email and text message scams among others, it shows the scale of the APP problem.

How to avoid APP scams

Telephone APP scams try to pressure customers into moving money from their account to another.

Santander research in June 2020 found 45% of people would willingly move their money to a so-called safe account if they believed they were talking to a police officer or bank worker over the phone.

To avoid being tricked by an APP scam:

  • Remember that a person in authority will never ask for personal details over the phone
  • Remember a bank employee or a police officer will never want you to move money to another account

If you receive a phone call telling you to move money - or do anything else you're not sure about - hang up and call the bank yourself on a publicly available number. You can report the previous call and, if anything is wrong with your account, the bank will be able to tell you.

HMRC fake phone call scams

HM Revenue & Customs (HMRC) scams are a type of APP fraud as they involve a call from someone pretending to be from HMRC or run an automated message to say money is owed to the tax authorities and threatening action.

If there's a person on the other end of the phone, they press a person to transfer money immediately. If it's an automated message, they leave a number for a customer to call back.

We've seen specific warnings about HMRC fake phone call scams in the past, and there are regular spikes around January and July when self-employed people make tax payments.

Another alarming HMRC scam has criminals calling households and threatening arrest for fraud unless the recipient hands over payment details and pays a fine - sometimes amounting to thousands of pounds.

Equally, there is also scam focused on the creation of realistic lookalike websites. These sites trick people into calling premium rate numbers - charging extortionate amounts for services that HMRC provides for free.

How to avoid HRMC scams

These scams work because the threatening language used makes people act quickly, and without thinking.

But the language is the biggest clue that these "HMRC" calls aren't legitimate: HMRC never calls up out of the blue and threatens people with legal action. If they call you regarding payment at all, it will be about a debt you're already well aware of.

If you hear any of these automated messages, hang up immediately.

Tech support scams

Tech support scams involve criminals cold-calling households - often targeting the elderly - and pretending to be from Microsoft.

Fraudsters say they've received reports of computer problems and then offer to help the potential victim fix the computer. They talk the recipient through a process which actually gives control of the computer to the criminal After that, the criminal can:

  • Install a keylogger to record passwords etc.
  • Scour the PC for details that allow them to take money

They might also find personal details or hold files to ransom, using them to extort or blackmail the victim.

As with HMRC scams, we see regular warnings from fraud agencies about the scale of losses from tech scams. For example, Action Fraud warned more than £2.1m was lost in such scams in November 2020.

How to avoid computer help scams

If you haven't called a tech company like Microsoft and asked them to ring you back, there's no way the company will be ringing you out of the blue. So, assume anyone pretending to be customer service from a computer company is a scammer - and hang up immediately.

SIM swap scams

This is phone-focused rather than committed over the phone, but SIM swapping is so common that it deserves a mention.

SIM swapping is when criminals get a mobile phone operator to give them a replacement SIM card for a phone they never owned.

They convince employees by using illegally acquired personal details, saying they lost their phone or had it stolen.

Afterwards, the victim's SIM card stops working. The criminal, now in charge of the phone number, can use it to access any sites where security codes are sent to mobile phones.

How to avoid SIM swap scams

Acting quickly is the only way to stop these scams. If you receive a text or email asking for confirmation of a SIM replacement request, call your phone provider immediately and tell them you didn't action it.

Apart from that, you should be cautious with your passwords and personal information. Think about choosing a secure mobile phone, and using a password manager.

How to avoid telephone scams

We've discussed ways of avoiding specific scams already, but there are some general rules to bear in mind when answering the telephone.

If you get an unexpected call or someone asks you to transfer money:

  1. Consider whether the call was expected or whether it's out of the blue
  2. Don't assume a call coming from an apparently genuine number is genuine - numbers can be spoofed
  3. Don't give out personal details over the phone when receiving an unexpected call
  4. Even if a caller knows your name and other personal details, don't assume they're genuine
  5. If someone is offering something that seems too good to be true, it usually is
  6. Don't be rushed if someone presses for an urgent response
  7. Hang up as soon as you feel uncomfortable or uncertain

The key point is that telephone scammers can be encouraging or threatening depending on what usually gets them results. Be prepared for anything and don't trust a caller simply because they say they are from a particular organisation.

Beware of call backs

A good way of minimising fraud risk is by calling back the organisation that rang you. This should ensure you end up speaking to a genuine employee of whoever you want to talk to.

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.

Is telephone banking safe?

Concerns about telephone scams naturally lead on to worries about telephone banking and whether it is safe.

The method of calling a customer and pretending to be a representative of a bank can be used to get customers to transfer money to a fake account.

A variant on this scam is sending a courier to pick up a customer's bank card to destroy it securely or take it to a safe space.

As we've discussed throughout this guide, suspicion is the best form of defence and refusing to discuss anything with unexpected callers is the first line of that defence.

If you choose to bank by telephone, always do the following:

  • Call on the official number provided by the bank
  • If calling the bank after a suspicious call, use a different line if possible

Remember that, as long as you initiate the call through the proper channels, the chances of being scammed through telephone banking is extremely slim and would require call centre staff deliberately stealing details - and banks have measures in place to stop that.

Plus, telephone banking is on the decline and has been overtaken by mobile banking, making it a less lucrative option for fraudsters looking for a quick scam.

It's also true that some scammers can use details they have harvested to try and pretend to be you on a phone call to the bank.

This is getting harder thanks to the protocols put in place by banks, with security software working to identify genuine calls and block fraudsters.

How much is lost to telephone fraud?

We can look at UK Finance's Fraud - The Facts 2021 report looking at data from 2020 to understand how much people are losing to telephone fraud.

Figures for APP fraud (covering online as well as telephone fraud) show losses of £479m in 2020 and a 22% increase in the number of cases reported.

In addition, we have specific figures for telephone banking fraud where a criminal gains access to a customer's telephone banking account and makes an unauthorised transfer of money away from it.

UK Finance figures show that in 2020:

  • £16.1m was lost to telephone banking fraud, a reduction of 32%
  • 7,490 cases were reported, a reduction of 33%
  • A total of £58m of attempted telephone banking fraud was stopped by bank security systems
  • 12% (£2m) of losses were recovered after the incident

So, there are significant losses from APP fraud and telephone banking fraud in the UK, meaning we all need to stay vigilant to the risks, protect our details and hang up whenever we're uncertain about something.

What's being done to stop fraud?

Telephone fraud is being tackled alongside other initiatives to stop other types of fraud like in-branch and online fraud.

In May 2021, HSBC announced their VoiceID biometrics system had helped to reduce telephone banking fraud attempts by 50% in 2020, saving £249m in attempted fraud in one year.

We also see banks acting more rapidly when they believe they might have been compromised such as Tesco Bank taking action to close credit cards down in 2018 after fears a third party could have accessed data and Monzo telling customers to change their PINs in 2019 following a security breach.

Other anti-fraud initiatives include confirmation of payee measures, where the correct name of the recipient is checked before money is sent. In November 2018, a trial began for an anti-spoofing system designed to pinpoint scam bank text messages. HMRC are using similar technology to crack down on fake tax texts.

Meanwhile, SIM-swap scams are being targeted by phone companies such as Three, who are working with security experts to reduce the scams in their stores.

One major problem with fraud is that new scams are constantly appearing and banks have to act to deal with them quickly.

There are also debates over who should pay when customers lose money to scams, arguments that go all the way back to 2015 when the Financial Ombudsman Service (FOS) warned banks weren't liable for errors in two thirds of cases referred to the service.

Major banks came together in 2019 to sign the APP Voluntary Code that saw them refund more customers who had been tricked into sending money to a fraudster.

However, talks to make this shared pot of money a permanent fixture finally fell apart in April 2021, meaning banks refund scam victims out of their own coffers rather than the financial industry as a whole chipping in.

Yet it's worth pointing out that only 47% of APP scam victims received refunds in 2020 under the Code, so the chances are still that a customer will lose permanently from falling victim to a scam rather than getting the money back.

Summary: Stay vigilant

Telephone fraud remains a major problem in the UK, with fraudsters trying their luck in everything from pretending to be bank staff to persuading people into loan fee scams over the phone.

It can be too easy to accept what we're being told on the telephone, especially if we think we're speaking to someone in authority or if they have all our personal details to hand.

However, if we take a step back and treat every call as though it's a scam, we're less likely to fall victim to fraudsters. While being on constant alert can induce security fatigue, it's the best way of combating fraud and keeping our money safe.

In the same way that credit card scams have become a frustrating part of life, telephone scams are here to stay for the time being.

We do see the Government, banks, telephone companies and other providers work to fix loopholes and protect customers wherever possible, but the best remedy for any unexpected contact over the telephone is simple - hang up.


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