What is Bank Transfer Fraud and have you been involved?

Bank transfer scams have steadily risen over the past few years with the move to online banking and digitisation. Understanding money transfer scams, the different types of money transfer scam that exist, and transfer to account fraud investigations can be complicated. St Pauls Chambers are here for you to offer expert advice in all manners of bank transfer fraud cases. In this article, we’re going to answer the following questions:

  • What is bank transfer fraud?
  • What are the different types of money transfer scams?
  • What are common features of a bank transfer fraud attempt?
  • What to do if you’re faced with transfer to account fraud penalties

What is Bank Transfer Fraud?

Money transfer scams occur when a scammer tricks victims into transferring money from their bank account. Money transfer scam artists may pose as a bank, a legal professional or an official body such as HMRC.

According to UK Finance, more than £208m was stolen from bank transfer fraud victims through bank transfer fraud in the first half of 2019. This can take place in many ways, and our experts in bank transfer scam law have represented various cases should you require assistance in a case.

What are the Different Types of Money Transfer Scams?

There are many different methods that fraudsters can use to commit bank transfer fraud. Common bank transfer scams include:


Phishing is a type of money transfer scam where fraudsters ask victims for personal details via email, such as passwords and bank account details. In this form of bank transfer fraud, phishers pose as legitimate companies or imitate trusted contacts, such as the victim’s bank, to trick the victim into handing over sensitive information. This sensitive information can then be used to hack the victim’s bank account and make unauthorised transfers into the fraudster’s account.

Lottery and Sweeps

In these kinds of money transfer scams, the victim is notified that they have won a lottery or sweepstake and are asked to pay a fee in advance to receive the prize. This is also one of the types of advance fee scams. The 419 scam is another example of bank transfer fraud that also falls under advance fee fraud.

Charity Money Transfer Scam

This type of bank transfer fraud refers to fraudsters who pose as a fake charity and contact unwitting victims, persuading them to transfer money into the non-existent charity’s bank account as a ‘donation’.

Stranded Traveller

In this case, a fraudster hacks an email account and send emails to everyone in the email address. These emails typically follow a generic storyline, such as being stranded abroad and in need of a loan to help them get back after being robbed.

Online Dating

Here, the fraudster poses as a love interest on an online dating site and earns the trust of the bank transfer fraud victims. Once an emotional connection has been established, the fraudster asks the victim to wire them money to help them.

Social Media

Increasingly, young people are becoming targeted on social media and being pulled into bank transfer fraud and, by proxy, money laundering by becoming money mules.

The fraudsters tend to target under 25s with no criminal history and offer a ‘get rich quick’ arrangement whereby the victim agrees to have funds placed in their back account and follows instructions to transfer it onwards in exchange for a payment. However, this is a technique fraudsters use to make illegally acquired funds more difficult to trace.

Even if the mule is unaware of what is going on, they are still committing a crime by allowing their bank account to be used for fraudulent activity. Not only could this result in up to 14 years in prison, but it also makes it difficult to open a bank account in the future or to apply for a mortgage.

Common Features of a Bank Transfer Fraud Attempt

Here are some typical characteristics of a bank transfer fraud attempt:

  1. Urgency

Bank transfer fraud victims are often rushed into making a decision by the fraudster who creates a sense of urgency around the situation. Sometimes a money transfer scam will involve the fraudster targeting the victim’s fears. They may send messages to an individual, threatening job loss or a prison sentence, for example, if the required payment isn’t transferred immediately.

  1. Unprofessional communication

Communications from fraudster, including texts, emails or social media messages, may include grammatical errors or bad links that don’t actually go where they’re supposed to.

  1. Trusted organisations

At first, contact appears to be from a trustworthy source, such as a bank or the police. However, this could turn out to be a fraudster impersonating the organisation. It’s worth remembering that trusted organisations will never contact an individual requesting full password or PIN information.

  1. Links to click on in an email or text

A link in an unexpected email or text could potentially be a phishing link where the victim is tricked into providing personal information. What’s more, opening unexpected emails and clicking on bad links can trigger viruses. Viruses can infect a computer with malware that can capture all information entered into the device, such as passwords and credit card numbers.

How Do Banks Protect Against Fraud?

Voluntary Code

Banks are signing up to the new code to ensure that they follow a new set of standards to protect their customers against any potential money transfer scams. These new standards under the code include:

  • Pinpointing vulnerable customers to decrease levels of bank transfer fraud victims.
  • Delaying or freezing payments that might be classed as a money transfer scam.

According to Which, the following banks have signed up to the new code to protect their customers: Barclays, HSBC, First Direct, M&S Bank, Lloyds Bank, Bank of Scotland, Halifax, Metro Bank, Nationwide, Royal Bank of Scotland, NatWest, Ulster Bank, Starling Bank, Santander, Cahoot and Cater Allen.

Confirmation of Payee (CoP) Checks

Banks introduced Confirmation of Payee (CoP) checks in March 2020 to tackle bank transfer fraud with additional checks on transfers to ensure that transferred money reaches the right account.

This measure is an effective way of checking that the payee name entered into the transaction, alongside the sort code and account number, matches the name registered to the account.

The CoP system works as many bank transfer fraud victims will know the name of the person or organisation they wish to send payment to, so when a fraudster supplies false payee details, this attempted transaction will be flagged as a warning to the bank. These checks can protect against fraudster intervention, tampered invoices, coercion or impersonation.

CoP checks will occur before most types of transactions, including CHAPS, Faster Payment or setting up a new Standing Order. However, CoP checks can’t be used on BACS payments, including Direct Debits, at the moment.

The Bank of Scotland, Barclays, HSBC, Lloyds, National Westminster, Nationwide, Royal Bank of Scotland, Santander and Ulster Bank have all implemented CoP as of March 31st 2020.

What to do if You’re Faced with Transfer to Account Fraud Penalties

If you or your client are being investigated for a money transfer scam, please read our previous blog post on how the bank fraud investigation process works for more information.

Our expert fraud barristers have a wealth of experience in matters related to bank transfer scams. If your client has been accused of or is being investigated for bank transfer fraud, one of our team can advise and represent you in any money transfer scam case.

Get in touch with St Pauls Chambers today for advice or assistance on bank transfer scam law.

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