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Thread: Account payment scam

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    Site Caretaker Dave A's Avatar
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    Account payment scam

    Are you sure the account you are paying into is indeed that of of the person/company you are supposed to be paying.
    Under the new scam, there was no request for a refund. Payment was merely directed into a fraudulent account.

    Con-artists usually targeted businesses by claiming to work for one of their creditors, and were in possession of all the necessary contact details on both sides and the exact amounts involved.

    They inform the victim verbally and in writing, using the creditor's letterhead, which they fax, that their banking details have changed and the amount must be credited to a newly appointed account number and institution.

    Victims deposited the money into this account and realised they had been scammed only when their genuine creditors contacted them about their outstanding accounts.

    There have been reports of incidents where stickers with new payment details have been stuck on to original invoices directing payment to fraudulent accounts
    extract from M&G report here
    This is deeply troubling from two points of view:
    • There has to be an insider involved
    • Debtors are going to use this as an excuse for delaying legitimate payment - in some instances even if they have not been scammed like this.

    To my mind the underlying source of the problem is that when you pay online, the account name details you have entered are not compared against the account name details of the recipient account. The whole transaction hinges on the account number only.
    Last edited by Dave A; 25-Apr-08 at 07:19 AM. Reason: typo
    The trouble with opportunity is it normally comes dressed up as work.

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    just me duncan drennan's Avatar
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    Quote Originally Posted by Dave A View Post
    To my mind the underlying source of the problem is that when you pay online, the account name details you have entered are not compared against the account name details of the recipient account. The whole transaction hinges on the account number only.
    My understanding is that this is common in Europe. With the relatively advanced level of banking here, I'm not sure why they have not implemented this. Would it just cause to many rejected payments?
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    Site Caretaker Dave A's Avatar
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    If you think of online credit card payments, the name of the cardholder must match exactly. Although technically a credit card payment is a "pull" transaction and an internet transfer is a "push" transaction, I can't see why the account holder name details can't be part of the verification check.

    If you think about it, the loophole circumvents the advantages gained by the FICA requirements for opening an account.
    The trouble with opportunity is it normally comes dressed up as work.

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    Most corporates now want proof of your account details, all tax compliance etc etc before approving you as a supplier. Even THEN the funds get paid into someone elses account and nobody fixes the problem. I have simply walked away slightly poorer and highly irritated with a corporate who I refuse to supply. So yup Dave it is a new excuse for late payment in the making.
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    Site Caretaker Dave A's Avatar
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    It's happening, folks. Be careful. I got an email notice today from a company we do business with advising that their bank details had not changed. Attached was a copy of one of the fraudulent letters that had been sent.

    Looking at it, it just has to be an inside job. If I had got that notice, I would have been none the wiser. It even quoted the contract number!
    The trouble with opportunity is it normally comes dressed up as work.

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    Site Caretaker Dave A's Avatar
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    UPDATE: Looking at it closer, the letterhead part was probably scanned off a statement. Probably not a bad idea to make sure your letterhead is significantly different from invoices and statements when it comes to branding.
    The trouble with opportunity is it normally comes dressed up as work.

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    Moderator IanF's Avatar
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    Quote Originally Posted by Dave A View Post
    UPDATE: Looking at it closer, the letterhead part was probably scanned off a statement.
    Dave with the new dtp programmes it quite easy to recreate some logos you can also download some of the bigger company logos from websites in vector formats.
    So the message is you have to be careful when this happens as some crooks even hijack phone lines.
    Only stress when you can change the outcome!

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    Scum, sorry Scam

    So my hunch was right about this nonsense. Let me tell you my experience with this type of thing. Twelve years' ago I had a cheque account with Absa which I closed after the company I worked for closed their Cpt Office. I could no longer keep up payments on my Master card and so, closed the account, hoping that charges wouldn't accumulate. A year after I had got myself back to a state of financial respectability, I went to Absa wanting to settle the balance on the account, only to be told that the account no longer exists. This was at the same time that the various banks were merging under the Absa Brand name. I felt uncomfortable about this and so, a couple of months later, repeated the exercise with the same results. Just to ensure that I would not get into trouble, I checked again last year and was told that the account no longer exists. Not long after this enquiry, I get my first call from a "credit bureau" demanding money from me for this account but when I email the person, the email bounces back with a message 'message undeliverable.' So I let it lie. A month later, another "credit bureau" phones about the same account and I ask them to send me details of the account but nothing happens. About 2 months' ago I get an email from a Legal Firm demanding money from me for this selfsame account, but at this point I am highly suspicious, So I ask the woman who didn't sound like she knew anything about the law, mind you, if she knows anything about this account, whether she has my ID number and if she has a current address for me. I think the deciding question was, "if Absa can't trace the account, how come you can?" for which she had no reply.
    To date, she still hasn't contacted me. It appears that there are scammers buying up old debtors lists from heaven knows where, trying to make a fast buck off ignorant folk.
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    Site Caretaker Dave A's Avatar
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    And they are getting better at it too
    The SA Banking Risk Information Centre has again warned companies and individuals to beware of fraudulent banking scams, such as the deposit and refund scam.

    These involved sensitive company information, including banking details, letterheads and client details falling into the hands of criminals, Sabric commercial crime office head Susan Potgieter said.

    While the modus operandi was not new, the perpetrators usually took advantage of the relationship a company had with its creditors, debtors, and even clients.

    "They would create an impression that a company is dealing with a reputable stakeholder, through using its letterheads, logos or any other form of identity to defraud the business.

    Fraudsters communicated with victims, usually in an official letterhead from the said "debtor", stating that a deposit had mistakenly been paid into the respective client's account.

    They then requested an immediate refund and provided the bank account details into which the refund should be made, usually asking for an electronic funds transfer.

    Often a deposit had indeed been made, and it was assumed a genuine mistake had been made and a refund was appropriate.
    full story from IOL here
    The trouble with opportunity is it normally comes dressed up as work.

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