30-Nov-2010 10:08

Be careful - Fraud that could sting you…

New figures reveal that criminals are taking a new approach when it comes to delving into our bank accounts and ripping us off. Theft through direct debits has surged 228% in the last four years, and now accounts for 10.6% of all ID theft.

So just what is going on, and how can it affect you?

How it works:
Most of this fraud is relatively unsophisticated: fraudsters use stolen details to set up direct debits for services like gyms and TV packages that they use. However, some pay money into accounts which they then withdraw money from.

They are exploiting the fact that so few people check their bank statements properly, so middling amounts being siphoned from the account can go undetected. These may be reasonably modest amounts every month, but they really add up - the average taken before it is spotted is £540.

In this year alone 26,000 people have been attacked in this way. It is thought to have taken off after chip and PIN made card fraud more tricky and criminals sought a softer target.

The trend:
The fraud boffins reckon there's little to stop this trend from accelerating ,as we're showing increasingly less inclination to check statements - especially when we get them online.

LV= asked the Centre for Economics and Business Research what would happen to this sort of fraud, and it calculated that it will stand at 41,000 cases a year by 2013.

The good news is that the direct debit scheme promises costumers will get their money back if they haven't been careless with their bank details.

John O'Roarke, managing director of LV= home insurance, said: 'The rise in fraudsters setting up direct debits in victims' names proves the need for everyone to regularly check bank statements and ensure they're not paying out for someone else's mobile phone or any other direct debit they don't recognise. "

From an article by Sarah Coles