You always need to be on your guard when it comes to banking and money matters. That doesn’t mean being suspicious or paranoid. Rather, it means exercising care and maintaining a healthy scepticism towards individuals or companies when you’re online. We recommend you take the following precautions:

How to bank safely

  • Find out something about the company or individual you are dealing with. Do an internet search, look for reviews, ask for a physical address you can check, and look up the company on the Companies Register.
  • Check Consumer Protection’s scam alert website.
  • Check with someone independent and trustworthy before you commit to anything.
  • Do not give out account details unless the business is established and trusted.
  • Never accept money into your account for subsequent transfer to others.
  • Never give out your PIN or internet banking password.
  • Check your accounts regularly to ensure money is going to the right places.
  • Report any likely scams to your bank.
  • When emailing people about making a payment, confirm the payment details using another form of communication (such as by phone). You may not be communicating with the person you imagine, because fraudsters hack into email accounts and assume the account holder’s identity. A quick phone call can foil such deception.
  • Contact your bank immediately if you suspect you have been scammed. It may be able to reverse a payment (but that’s unlikely if you’ve authorised the payment and it has gone through).

If you find you've become the victim of a scam and you complain to us, our job is to determine whether your bank is liable for the loss.

Phishing scams

Scammers try to trick customers into giving out personal information such as bank account numbers, passwords and credit card numbers. This is called a phishing scam. Typically, customers receive an email from what looks like their bank. It will say they need to confirm some personal details, usually their internet banking username and password. It will contain a link to a website that looks like the bank’s but is fake. Customers who enter these details will soon find scammers have accessed their accounts and cleared out their money.

Be extremely wary of emails that appear to be from your bank and that ask you to confirm your personal details. Banks will never ask you for your password in emails. Don’t click on links within any email if you have the slightest suspicion about its authenticity. Simply delete the email. If you need to go to your bank’s website, type the address into your browser.

If you enter your internet banking password and other details into a fake website, it’s likely you will be liable for any losses because you disclosed this crucial information.

Fraudsters may also make phishing phone calls pretending to be your bank, telephone company, government department or a computer company. They may ask you to turn on your computer and download software that gives them access to everything on your computer. A fraudster who has gained access to your computer may be able to steal money from your bank accounts. Be very cautious about unsolicited phone calls, no matter how plausible the caller sounds. 

Sending money to scammers

Scammers can also trick bank customers into sending money to them. How they do this varies. A common way is to ask customers to send a processing fee in order to receive an inheritance or the proceeds of an investment. Another is for someone met on an online dating site to seek financial help. Losses from such scams can run into tens of thousands of dollars.

Always be careful if someone you don’t know or have met only online asks for money. It can seldom be recovered. Your bank is very unlikely to be liable for losses you suffer if you give it instructions to send money to someone, it follows those instructions and you later find out that the individual was a scammer.

Money mules

Another scam is to ask a bank customer – the mule  – to accept and forward on money stolen from another victim’s bank account. Scammers convince people there is a legitimate reason for the transfer, such as paying a fee associated with a job application or helping someone with whom they have an online relationship.

A bank may reverse a payment from a mule’s account if the money is found to have been stolen. This, in turn, can cause the mule’s account to be overdrawn if there isn’t enough money in the account. The bank will ask the mule to repay the overdrawn sum.

In such cases, we consider whether the bank’s terms and conditions allow it to reverse a payment from a mule’s account. We also assess whether the bank had sufficient information to conclude the money was stolen before it reversed the payment. If so, the customer will be held liable for the loss.     

PIN scams

These aim to get customers to disclose their PIN. Scammers have usually already stolen a customer’s wallet, but to use any credit or debit cards they need the PIN.

Scammers use different techniques to get intended victims to disclose their PIN. Scammers may, for example, say they are from the bank and have noticed suspicious transactions that indicate a card has been stolen. They will suggest cancelling the card, but doing that, they add, will require the customer to verify his or her PIN in order to authorise the cancellation. The giveaway here is that banks never ask for a customer's PIN.

Another technique is to contact a customer and say he or she has won a prize. The customer is asked to make up a four-digit number for identification purposes when collecting the prize. The scammer may be making the call from an ATM and will tap in the number. If not the PIN, the scanner will say that number has been taken, and to pick another. Subconsciously or otherwise, many customers will eventually give out their PIN.

By disclosing your PIN to anyone, you are breaching the terms and conditions of your account or card and you will generally be liable for fraudulent transactions. You won’t be liable for fraudulent transactions if you have taken reasonable care of your card and PIN. 

Never give out your PIN or internet password, your bank will never ask for them. Use our tips above to double-check who you are dealing with.

Rectangleguybehind