How to foil phone scammers

There are two money scams operating via telephones at present. Fraudsters are clever and quick to pick up on an opportunity: they watch for news items and issues that are likely to lodge in the memories of potential victims.

One such opportunity has arisen because of media focus on the court ruling that excessive payment dishonour, late payment and over the limit fees have been charged by banks and they must refund these to tens of thousands of customers.

Noticing this, the scammers started whipping their call centre operators into action on their cold call lists to find potential victims. When they call they say they are from the bank, "checking" your, personal details, claimed to be on their database, so that they can refund excess fees you've been charged. They will pick a fictional but attractive amount of refund. In your head are recent media reports that refunds will be sent soon.

The caller asks to confirm your name, address, birthdate and bank account number so the "refund" can be paid directly into your account. They say "regulation" requires the information be "confirmed" before you can get your refund.

This information is the backbone of your personal financial ID. If you give it to them, they use those personal details to steal your identity and we know what they will do with your bank account details rifle though it as soon as they get off the phone.

Fair Trading NSW reports a more sophisticated version of this scam where the caller provides a phone number to call and a reference number to quote to find out how to claim thousands of dollars in reimbursement. So it sound as if everything is legit, when, in fact, the same scammer or their mate answers your call.

If you retort "You must already have my bank account and other details because you are calling from my bank", they will have a ready excuse, such as "We are the bank's call centre chasing customers up and the bank didn't give us all the details required", or "You appear to have several bank accounts and we want to know which is the correct one for this refund", or "We've been told to confirm these details".

Either way it's a scam that aims to simultaneously steal significant parts of your identity and get into your bank account.

Sometimes, in a further fraud, the scammers will claim the refund process has been outsourced by the bank to an overseas centre and there is an administration charge for accessing your refund. They may ask you to send money to cover the administration cost and to wire it to the account number provided.

This scam will set off alarms for experienced investors but can catch the less sophisticated, your elderly parents, for instance, who may trust someone they think is a bank employee.

If you are entitled to an excess fee refund, your bank should send you a letter; you will not be contacted over the phone. In fact, the bank, not wanting to pay out, is likely to wait for you to contact it first to see if you are entitled to a refund. By default the bank may work out that only a fraction of customers will get in touch and it will have to pay out less money. If you initiate the call to your bank, you will know who you are dealing with. People cold calling you could be from anywhere.

The other popular scam is the cold call claiming to represent "injury Australia group" or a major insurance company seeking personal details related to accident claims. The scammer suggests someone at your address has been involved in an accident in the past three years and is entitled to compensation of thousands of dollars. But again the caller needs to "confirm" your personal details for their database. Don't be conned when, among the details requested - as well from your full name, address and date of birth are bank account numbers and names so they can deposit compensation funds in your account. Never provide this unless you are sure who you are talking to, and that means calling the insurer yourself.

If you have lodged a genuine accident insurance claim, check with your insurer and let it know you have been called.

DO:

Keep the firm rule that, if you receive an unsolicited call or you do not know who the caller is, you don't give the caller any personal information. You could answer "yes" to every question asked, you will find the caller will eventually get the message and hang up. Remember that genuine compensation payments will be communicated via letter or secure email and not over the phone.

DON'T:

Assume the caller is from your bank just because they say so. Call your bank instead and find out if you are entitled to reimbursement of excessive fees charged. And if you are entitled to such compensation, your bank has your bank account details anyway. If you think you have been scammed, or there has been an attempt to scam you, call the Fair Trading office in your state and report the details of the approach made.

DON'T:

Give your bank details to anyone over a phone. If you do, your bank may make you liable for misuse of your account.

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