Scammers Lift Life Savings with Fake Card Reader

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Criminals are using a new technique to defraud you of your money, with one elderly woman already losing her life savings in the scam.

We’ve often covered the tricks used by financial fraudsters here – from psychological tricks and the language they use to deceive us to cash point scams – but this latest trick is particularly brazen: Victims are sent a fake card reader which will capture your banking data.

Banks employ a variety of methods to ensure account security for online banking. While Lloyds uses multiple password login process, HSBC employs a code authorising device that allows account access. RBS, on the other hand, use card reader machine – just slot your card in and the reader verifies the account.

One elderly woman received what was, apparently, a legitimate card reader. Believing she had no need for it, she cast it aside – until she received a call from the criminals, impersonating RBS staff, asking if she needed help activating the device. The woman refused, saying she intended to return it to the bank. That’s when the criminal struck, explaining that if she inserted her card into the machine, he would cancel it for her.

Within hours, she’d lost her life savings.

News of the scam broke via Facebook, when Patricia Barry, the victim’s friend, posted an urgent warning. She explained:

‘URGENT!! Can I just make my friends and family aware of something I have dealt with today? One of my ladies received this digital card reader in the post two weeks ago from The Royal Bank of Scotland with the enclosed letter. She left it to one side as being elderly she wasn’t interested in it. Two days ago she had a phone call from the bank asking if she received it. She said she had but was taking it back to the bank as she didn’t want it, the ‘very nice man’ told her she didn’t have to do that he can cancel it for her and told her to put her card and number in to do this.’

The post continued:

‘The next day she went to the bank for a statement and yes you can guess every penny had been taken out of her account including savings for her granddaughters. She was devastated and the worst of it is SHE felt foolish and ashamed. I reassured her these scammers are very good at it. Luckily she got her money back but apparently this is a new digital system coming out now so please make your contacts aware of this as it looks very genuine.’

In response to the news that fraudsters were now manufacturing security devices, an RBS spokeswoman stated that their ‘digital banking card reader’ are used to authorise online transactions, and advised customers that:  

‘If you get a phone call saying it’s your bank, the police, or another company you trust and they ask for card reader codes, end the call immediately. Your bank will never ask for third party reader codes over the phone and you should not disclose these to any third party under any circumstances. If you receive a card reader in the post that you’ve not requested, report it to us immediately.’

However, that’s advice that shouldn’t cost anyone their life savings and raises serious questions over the validity of RBS’ current internet banking security tools. As with all financial scams, it pays to keep a close eye on your money.

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