Wednesday, May 11, 2022

We visit TSB’s hub to find out how consumers can identify and prevent fraud

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Fraud is one of the most common crimes in the UK but is still growing at an alarming rate

This is what I am told by a fraud worker at one of the TSB call centers while listening to calls from a range of people who are either victims of fraud, possibly committing fraud themselves, or are simply trying to get their cards unblocked.

“The biggest problem with fraud is education. People don’t know enough about it until they become victims and then it’s too late.”

I’m here to find out how banks are tackling the ever-increasing risk of fraud and to see first-hand how it’s affecting people.

Fraud is certainly on the rise as losses from unauthorized card, check and remote banking transactions have risen to £398.6 million in the first half of this year, up 7 per cent year-on-year, according to UK Finance.

Meanwhile, total losses due to fraud involving authorized push payments rose to £355.3 million in the first half of 2021, up 71 per cent over the same period in 2020, underscoring the risk for consumers across the UK .

I speak to a variety of staff at the TSB center, all in different roles, but all working to root out fraud. Under I shows what TSB is doing to stop fraud, what challenges it faces and what consumers can do to protect themselves.

types of fraud

One of the first people I speak to is Paul Davis, the scam director at TSB, who tells me that while there are a large number of different scams, scams generally fall into three categories.

There is “plastic”, that is, fraud that happens with credit or debit cards. These are mostly unauthorized payments, for example when the physical cards have been stolen.

Meanwhile, Non-Plastic covers many other authorized payments such as bank transfers, identity theft scams, and fake investments.

Then there’s the third: anti-bank scams, where people are lent money for mortgages, for example, with the applicant lying about their funds.

Mr Davis said: “This type of scam is much more unusual. TSB loses as much in a month to claims against TSB as it loses in a day to plastic and non-plastic scams.”

Of course, an unimaginable amount of fraudulent activity takes place every day, and Mr. Davis points out that TSB is currently the only bank with a “scam refund guarantee,” promising to give consumers their entire money back should they become victims.

However, TSB reveals that it probably only blocks 0.1 percent of transactions per day. But while that sounds tiny, the team explains the reasoning.

Alex is another person I speak to. He works in fraud analysis and creates the framework to detect fraud, for example by preventing people from making large payments to unknown beneficiaries.

He said: “TSB blocks about 70 to 80 percent of scam attempts, but we can’t stop everything.

“It’s a bit like an umbrella – if you put it up you can stop most of the rain, but when it starts to rain and you have to open it you get a little wet. For scams, we react quickly when new scams emerge, but some will leak out.”

Common Scams

While many people assume that older people are more likely to be scammed, the average age of victims reimbursed at TSB is 42 years old.

In fact, TSB shows that traditionally younger people are more likely to be victims of purchase fraud, such as when shopping online, but now more are becoming victims of investment fraud as investment opportunities and crypto scams increase.

Cryptocurrencies have seen a huge boom lately, but as a result, there has been an excessive level of fraud on crypto platforms, leading to TSB taking the step of blocking all payments to these services.

Meanwhile, social media is also responsible for thousands of scams a year.

Meta, which owns Facebook and Instagram, is one of the largest investment scam facilitators, according to TSB.

A scam analyst reveals that almost half of all investment scams reported to TSB are carried out using Meta. He believes the global platform could do a lot more to prevent fraud.

Many scammers advertise on social media products that don’t actually exist, with consumers paying upfront only to find their items never appear.

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