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HSBC reveals the scams that target bank customers

HSBC said customers should avoid offers that are 'too good to be true'. Photo: Jaap Arriens/NurPhoto via Getty
HSBC said customers should avoid offers that are 'too good to be true'. Photo: Jaap Arriens/NurPhoto via Getty (NurPhoto via Getty Images)

HSBC (HSBA.L) has warned its customers about fraudsters who are continuing to target people through a variety of methods.

The bank said investment scams were leading the losses compared to any other type of fraud. This has seen customers lose £14,173 on average.

Investment scams often involve customers being tricked to purchase fake bonds or cryptocurrency, HSBC said.

The bank also said it has revamped its free HSBC fraud and cyber awareness app, which is available for people to download regardless of whether they are customers.

It said the app gives users warnings about new scams being spotted as well as information on recognising and reporting scams.

"We are able to give real-time warnings through push notifications, information and education, to help more people protect themselves and their hard-earned money from these criminals," David Callington, HSBC UK’s head of fraud, said.

Investment, impersonation and purchase scams were the most common types of frauds seen across cards and payments in the six months from November 2021 to April this year. Here's what customers should look out for:

How to avoid being scammed

Experts have warned customers to look out for offers that appear to be "too good to be true".

Callington said: "With the cost of living sky-high, it’s no surprise people are lured in by schemes promising low risk for high returns. The general rule is that if an offer seems too good to be true, it probably is.

"Customers can check if a company is authorised via the FCA (Financial Conduct Authority) website – if it’s not regulated we wouldn’t recommend investing."

Watch: What are the risks of investing in cryptocurrency?

Investment scams

The banks said criminals begin an investment scam with a message or call out of the blue about an opportunity that is "too good to miss".

Victims can be contacted by fraudsters for months or sometimes years to get as much money from them as possible.

HSBC is receiving reports of scams that involve trading in genuine businesses, but they are being carried out through a fraudulent intermediary.

Fraudsters will show victims their "investments" or "returns" through an app or website often fake or created by them but will eventually lose contact with the intermediary.

HSBC said it saw an increase in purchase scams involving falsely advertised vehicles online. Photo: Getty
HSBC said it saw an increase in purchase scams involving falsely advertised vehicles online. Photo: Getty (PierreDesrosiers via Getty Images)

Purchase scams

These types of scams involve people being misled to pay in advance for products or services that are never received.

According to HSBC's figures there has been an increase in purchase scams involving falsely advertised vehicles online.

Some involve fake shipping websites that promise to look after funds for vehicles purchased abroad, and some advertise vehicles at well below market value to lure customers in.

Customers are then being convinced to purchase either by putting down deposits or outright payments.

Rocio Concha, Which? director of policy and advocacy, said: "Every day, consumers are being targeted by fraudsters who are relentless in their attempts to steal money and personal information – with devastating consequences for victims.

"The increasing sophistication of bank transfer scams leaves all of us at risk, yet consumers continue to face reimbursement lotteries depending on who they bank with."

Impersonation scams

Customers are falling for impersonation fraud which are seeing criminals pretend to be a credible organisation, such as a bank or retailer, to convince people into parting with their cash or personal information.

HSBC said the number of impersonation scams originating from calls from fraudsters posing as Amazon has risen between November last year and April 2022.

It is also seeing criminals impersonating HSBC UK’s fraud team and calling customers to say their account is at risk.

This is usually after the fraudster has sent a scam text impersonating another organisation, for example, Royal Mail, and requested a small payment which requires the customer to input their account details.

Scammers then tell the customer they need to move funds to a "safe account", which is usually an external bank account controlled by the fraudster or, increasingly, a crypto currency trading platform.

"HSBC UK will never ask you to move money to a safe account or disclose your one time passcode. Likewise we would never ask you to delete your mobile banking app. If someone asks you to do any of these things, hang up right away, it’s a scam," Callington added.

Watch: The risks of buying now and paying later