Staying scam aware: direct debit refunds
Nobody is immune from fraud, which is why it’s important to be aware of ways scammers might target you.
One scam that has become more common recently is known as a ‘Direct Debit Indemnity Fraud’.
How does Direct Debit Indemnity Fraud work?
Banks in the UK offer a Direct Debit Guarantee, which lets customers get an immediate refund if a Direct Debit is taken by mistake.
To take advantage of this, fraudsters contact people offering to help them reclaim payments made by Direct Debit, like council tax or rent.
The fraudster will either ask for your bank details directly or ask you to give them to a third party, like entering them into an online form or website.
Once they have your bank details, they file a claim with your bank to try and get back all the Direct Debit payments that they can. Essentially, this means your bills and payments will be temporarily refunded to your account, but you’ll still owe all that money to whoever it’s refunded from.
When the money has been returned to your account, the scammer will either transfer the money over to themselves (if they have full access to your bank account), or they will contact you and pressure you to send the money to them, pretending it’s a fee, overpayment or mistake.
Once that’s done, you’ll be left with all the unpaid bills – potentially thousands of pounds worth.
As well as the immediate hit to your finances, the bank may think you were involved in the fraud knowingly, and it will make it much harder for you to get loans or credit in the future
How to stay safe:
- Never share your bank details with anyone.
- Check your bank account regularly for payments you didn’t authorise – even if it’s very small amounts.
- Remember: if it sounds too good to be true, it is.
- If something feels odd, you can always double check with your bank. You can also always contact our free Money Matters service who will be happy to talk things through with you.
Money Matters is a free, flexible service designed to help you maintain your tenancy and take control of your finances. With well over 30 years of experience between the team, you can be sure that if they don’t know the answer, they will know someone who does.
They can help support you through whatever is causing you concern, with over the phone or face to face advice available.
To find out more, call us on 0300 5000 600 and ask for Money Matters, or fill in the form on our website and someone will be in touch
