In this article we share details of this scam, tips to avoid it and most worryingly, why the banks are refusing to reimburse the victim.
The scam
You are having some building work carried out by your trusted builder, perhaps who you have used for several years. You then receive an email from him requesting cash upfront so that he can start ordering the materials. The email has come from your builder’s email address, with the usual pleasantries and signed off in the fashion he would on any other day. Bank details are also provided for you to make your payment.
However, not all is as it seems. Your builder’s email account has been compromised and the bank details provided for payment are those of a criminal.
Why are the victims not being reimbursed by their bank?
While fraud victims are generally refunded by banks if they are not at fault, those who unwittingly transfer money to a criminal’s account do not have the same protection as the banks say they have handed over cash voluntarily. By the time the account into which the money was paid is checked, the money is usually long gone and unable to be retrieved.
Banks have pledged in future to cross-check the recipient’s account number with the name on the account. A message will pop up on your screen saying something like: ‘Do you mean to pay Joe Bloggs?’ to make it more clear who you are paying. However, this technology is not expected to be in place for up to 3 years.
Tips for construction firms to help avoid this fraud
- Ensure that your email accounts have strong passwords that are not used on other software, websites or apps.
- If you are paying money into a new account that you haven’t before, always check verbally that it is not a fraudulent request.
- Communicate this article to your customers so that they can stay vigilant.
Award-winning chartered accountants offering tax, audit and advisory services.