MILLIONS are being forced to use online banking as more than 5,000 high-street branches have shut in the last eight years.
But the amount of money stolen by crooks using mobile banking apps jumped by a third last year to £34MILLION — of which only £2million was recovered.
Age UK says more than three million elderly are not confident managing their finances on the internet and a third say it is because they fear scammers.
For those who fall victim to fraud, whether or not they get their money back often depends on who they bank with.
Sarah Davidson investigates the problems customers are facing and explains what you can do to protect yourself online . . .
FRAUD RISING: We are facing “an online fraud epidemic”, says James Daley, boss of campaign group Fairer Finance. He warns: “The rules to protect consumers are not strong enough.”
The total stolen from customers last year was £1.2billion — up 60 per cent from £730million in 2020 — banking body UK Finance says.
Crooks succeed with around half of attempts at online banking fraud, and are most likely to do so if the victim uses a phone app to manage their account, rather than a computer.
STOLEN PHONE SCAM RISK: Experts warn it is too easy for fraudsters to access banking apps once they have stolen a phone.
Consumer group Which? says thieves may peek over a victim’s shoulder as they type the code to unlock their phone. Then, after stealing the phone, they use the code to get into banking apps.
Which? also found some smart-phones’ “face ID” function could be opened using only a photo of the owner. Face ID can also be used to get into some banking apps and to approve card payments, depending on how your phone is set up.
LOOPHOLES IN APPS: Which? found further weak-nesses in banking apps’ security. With some, the fraudster only needs to enter debit card details, which are stored in the app, to add a new payee and transfer money to any account they choose.
Many apps rely on “one-time pass-codes” — codes sent by text to you when making a payment. But if a criminal steals your phone they can intercept these messages, to transfer cash to their own account.
Which? found it was “too easy” to reset the passwords of various Lloyds Banking Group apps, including Halifax and MBNA. It also warned it was easy to reset the password in the American Express app.
Which? Money editor Jenny Ross said: “A lack of strong security protections in some banks’ mobile apps is a huge concern.”
FIGHTING FOR HELP: Victims must often fight banks to recover money lost to fraud — and get back only £600 for every £1,000 stolen. Banks are not legally bound to refund victims who have been tricked into sharing details or fallen for other similar cons.
The situation has improved since many banks signed up to a code agreeing to refund scam victims unless there was evidence they had been “careless” with personal details. Before this, customers typically got back less than £200 for every £1,000 stolen.
REFUND LOTTERY: Whether or not you get your money back depends on who you bank with.
TSB is not signed up to the code, but its own fraud guarantee means it refunds victims in 97 per cent of cases. Yet other banks and payment card providers, including most of the newer ones that are digital only, are not signed up to the code and do not have their own refund guarantees either.
They include Monzo, Kroo, Mar- cus, Chase, Monese, Revolut, Tide, Wise, Atom, Tandem, Post Office, Sainsbury’s, Tesco and Zopa.
App-based Starling is the only major digital bank signed up.
Later this year new rules will force banks to reveal how often they provide fraud refunds.
WHAT THE BANKS SAY: Lloyds said keeping customers’ money and data safe are priorities, and added: “We have robust, multi-layer security across our online and mobile banking services.”
Amex insisted it uses “a number of controls” to protect customers and said anyone worried should contact them directly.
A UK Finance spokeswoman said: “Hundreds of millions of pounds has been reimbursed to thousands of customers since the voluntary code was introduced.
“The banking and finance sector is the only one that reimburses people, even though the vast majority of scams begin online, via phone or by text.”
4 WAYS TO PROTECT YOURSELF
- If you get a suspicious call, text or email, pause, take five minutes and speak to a friend or relative before you do anything.
- Never use online banking when on public wifi.
- Protect your mobile phone with a pin code and beware who might be looking over your shoulder.
- Never trust that a caller is from your bank, even if their number looks correct – phone the bank back using the number on the back of your card.
Weigh up tariffs when energy price falls
ENERGY prices are finally on the way down, but you might not see your monthly bills fall straight away.
From July 1, the cap limiting how much suppliers can charge will fall so that a household with average energy use will pay £2,074, down from £2,500 a year. But at the same time, government-funded discounts on bills are coming to an end so the cost to energy customers will remain around the same level for the time being.
Leah Milner explains everything you need to know about the changes…
CAN I BE CHARGED MORE THAN THE CAP? You might still pay more than £2,074 per year because that’s just the figure for a typical household. The price cap limits how much suppliers can charge you per unit of gas and electricity that you use – it’s not a ceiling on annual bills. That means if you’re a large family or use a lot of power – for example, if you charge up an electric car – your bills could still be a lot higher.
IS IT TIME TO SWITCH DEALS? Not yet. Most people are currently on their supplier’s standard tariff which is still the cheapest option for now.
The fall in energy prices should prompt energy suppliers to start launching cheaper fixed-rate tariffs soon. We’ll keep you updated in Sun Money.
Ashton Berkhauer at MoneySuperMarket said: “Consider switching carefully and don’t immediately change to a fixed tariff because it costs less than you pay now.” However, for those who want the peace of mind of knowing that their bills won’t increase for a set period, a fixed-rate tariff can be worth taking even if it is slightly more than you are currently paying.
You will need to weigh up your options.
SHOULD I CHANGE MY DIRECT DEBITS? If you pay your energy bills by direct debit, check how much you’re paying as the weather improves. If you are building up more credit than necessary on your account, send your supplier an up-to-date meter reading and ask for it to review your monthly payments.
Some suppliers make it hard for you to claim back credit on your account so if they don’t listen by phone or email send a formal letter. You can also complain to the energy ombudsman at ombudsman-services.org.
If you’ve got a prepay meter, don’t top up by more than you need in the run-up to the price changes on July 1 or you’ll be spending over the odds.
WHERE CAN I GET HELP? Although prices are coming down, the average household will still be paying around double the annual bills they were on two years ago.
If you’re struggling, check you’re not missing out on support at turn2us.org.uk.
Call your council to check for local schemes like fuel vouchers. Many suppliers including British Gas, E.On and others offer grants of up to £1,500 for hard-up families.
