ICB Ring - Fencing Fraud
Ring-fencing – a new opportunity for fraudsters? Learn how to avoid becoming a victim.
Ring-fencing comes from a 2011 recommendation of the Independent Commission on Banking (ICB) that UK banks should separate their everyday banking services from their investment banking services.
It’s called ‘Ring-fencing’ because it means putting those different services into separate legal entities. It’s designed to help protect customers, the industry and the economy from the type of financial crisis we saw in 2008.
Banks must make sure their customers are served by the legal entity that best reflects their needs by January 2019. The changes will be phased in this year and for some customers, it’ll mean new sort codes and account numbers. Affected businesses will have already been contacted about it.
Although most customers’ details won’t change, fraudsters could use Ring-fencing as a way to seem legitimate. It’s important to stay vigilant – here’s how they might adapt some existing scams.
Invoice redirection is well established, but it might catch you off guard if it’s framed as being part of Ring-fencing. You might see something like this:
“Due to the Ring-fencing exercise being undertaken by all UK Banks as instructed by the Independent Banking Commission, we’ll need to change our bank account details to the following……”
Remember – check any instructions to change account details directly with the supplier, using contact details that you know are genuine.
Criminals may telephone you, impersonating a member of bank staff, and use Ring-fencing to encourage you to transfer funds to a new account they’ve set up especially for your business. For example:
“Due to the Ring-fencing exercise the bank is undergoing, as required by the Independent Banking Commission, we’ll need to open a new account for your business. To provide you with continuity of service, we’ll need you to transfer your balance to the new account details. Your new account details will be added to your Online Banking profile overnight.”
If you follow those instructions, you’ll be sending your money straight to an account controlled by the fraudster.
Remember – we’ll never ask you to transfer funds or make payments for any reason. Treat any request to do so with suspicion and report it to us immediately.
Please make sure you’re familiar with these tactics. Even though they’re well known, it’s easy to be caught out with a well-timed and legitimate-sounding request. Don’t become the next victim.
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If you need any other help, please contact your Relationship Team.