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Banks make it easy for scammers

Too fat to act?

Internet Security Threat Report 2014

Financial scammers are making easy pickings of small businesses because banks are too lazy to check their transactions, say fraud campaigners Early Warning UK.

It appears that standing orders are so easily forged that anyone can do it. The hardest part is getting a victim's bank account and sort code. Many companies put these on their websites to make it easy for their customers to set up electronic BACS payments.

Then all you need to do is mock up a standing order form and scribble an unintelligible signature. Make the standing order out to claim money from the victim's account and put it into your own, preferably fake account.*

Early Warning says the only reason this works is that the banks don't check their standing order forms properly.

The only means of verifying a standing order, says Early Warning managing director, Andrew Goodwill, is with the signature. But, he says: "It relies on the bank checking it...it's a loophole that needs tidying up. The fault is always with the bank because the banks are not checking."

We like stories that show banks up as greedy, lazy, anachronistic institutions.

The only problem is that Early Warning's evidence for this trend is still a little thin on the ground. In fact, it is not quite a trend, but comprises two reports. One case which was stopped by the bank in question, apparently because the amount was so high. Another report from a mobile-phone company says petty criminals are forging standing orders to set up mobile-phone contracts.

If the amount had been more reasonable the forged standing order would have slipped through the net, Goodwill reckons. (Money launderers being as greedy as money lenders - fancy that).

Nevertheless, Goodwill has a hunch it is a trend. And he is in the business of giving early warnings.

And it's not hard to believe he is right, not least because the banks are in the habit of caring more about their own profits than the care of their customers.

* If you do not have a fake account of your own, apparently you can get one by sending out spam offering people home working jobs on the proviso that they set up a bank account for you. Then you give them five per cent of everything you launder. Easy!®

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