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Santander Raises Alarm Over Surge in Impersonation Scams

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Santander UK has issued a stark warning, highlighting a surge in bank impersonation scams targeting hundreds of businesses.

Reports of these scams have doubled in recent months, with over 200 customers approached in September alone, according to the bank. Fraudsters, posing as bank employees, employ various tactics to manipulate staff into authorising payments and granting access to accounts and devices.

Chris Ainsley, head of fraud risk management at Santander, cautioned that impersonation scams are proliferating, with criminals adopting increasingly sophisticated strategies.

Typically, these scams initiate with a call or text purporting to be from a bank’s fraud department, furnishing the recipient with a case ID. Subsequently, the fraudsters direct victims to a counterfeit website, ostensibly to halt a fraudulent transaction from the business account.

One recent target of such a scam was Consolid8 Logistics, based in Gloucester. Russell Capel, the financial director, recounted an attempt to extract £18,000 by a scammer who possessed accurate information. Capel’s suspicions were aroused when the scammer’s demeanor turned aggressive, prompting him to contact Santander for verification, confirming the fraudulent nature of the attempt.

In response to the escalating threat, the Home Office initiated a public awareness campaign last month, underscoring the pervasive impact of fraud. With fraud accounting for approximately 40% of all crime in England and Wales, and costing an estimated £6.8 billion annually, concerted efforts are imperative to address this menace.

Efforts to combat fraud have gained momentum on the international stage, with the inaugural global fraud summit convened by Home Secretary James Cleverly. Addressing the summit’s attendees, Cleverly emphasized the need for enhanced international coordination to counter the global reach of fraudulent activities, particularly those orchestrated by overseas criminals.

The Payment Systems Regulator categorizes impersonation scams within the framework of authorised push payment (APP) frauds. Last year’s enactment of the financial services and markets bill mandated reimbursement for victims of such frauds.

Proposed measures to further safeguard consumers include establishing a maximum bank liability per fraud of £450,000 and granting banks the authority to halt suspicious transactions for up to 72 hours to facilitate thorough verification processes.

Bim Afolami, the economic secretary, affirmed that these legislative changes will bolster safeguards against fraud, providing banks and law enforcement agencies with vital time to intervene before funds are transferred to fraudsters.

However, concerns have been raised by industry stakeholders regarding the potential ramifications of these regulations. Innovate Finance, representing fintech firms, cautioned that the mandatory reimbursement scheme could pose significant financial challenges for smaller players, potentially undermining their viability.

Furthermore, the association highlighted the need for a holistic approach to combat fraud, emphasizing the critical role of online platforms, such as social media and telecommunications platforms, in facilitating fraudulent activities. Failure to address these channels effectively could leave the payments industry vulnerable to escalating costs and perpetuate the proliferation of fraud.