Fraud prevention groups warn of new digital wallet scam

The scam, identified by UK Finance, Cifas and the Cyber Defence Alliance, is being orchestrated by international organised crime groups. Criminals trick customers into revealing banking one-time passwords, allowing them to link stolen card information to digital wallets.

Criminals pose as well-known brands and trusted retailers, enticing consumers with attractive offers on social media or sending fraudulent SMS messages containing malicious links. These deceptive messages often present as offers to "help", such as reducing winter heating bills through living allowance applications, or notifications about undelivered parcels.

After clicking these links, consumers are prompted to enter their credit or debit card details before receiving a unique temporary one-time password (OTP) via SMS from their bank. 

However, this password has been requested by criminals who use it to create a new digital wallet on a separate mobile phone, effectively taking control of the consumer’s account. This enables criminals to make both online and in-store purchases using the victim’s card details.

Garry Lilburn, operations director at the Cyber Defence Alliance, said: "Our investigations have shown that international organised crime groups are orchestrating these scams and selling on compromised card details so other criminals can easily buy goods and services.

"It is vital consumers remain sceptical of offers that are too good to be true and that ask for card details."

Dianne Doodnath, principal of economic crime at UK Finance, commented: "Criminals are sophisticated and will make every attempt to steal personal and financial information.

"We encourage customers to be alert to potential threats of fraud, be cautious of sharing personal and financial information and avoid sharing OTPs with requests out of the blue. If consumers think they’ve been scammed, it’s important to contact their bank immediately and report it to Action Fraud."

Cifas Chief Executive Mike Haley added: "Scammers are using new technology to change their tactics at speed and find new ways to abuse consumers’ trust and steal from their bank accounts. We urge people to stop and think twice about any communications received unexpectedly and never act on urgency."

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