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HSBC UK has issued a warning to almost two million of its customers about a new gold scam.
The banking giant has told people to watch out for an impersonation scam which involves buying gold and handing it over to criminals for “safekeeping”.
HSBC UK added that it is contacting customers in a bid to highlight a “worrying trend” where scammers are targeting older customers.
Fraudsters are asking people for help with fake police investigations which lead to the customer withdrawing cash, buying gold and handing it over to criminals under the pretence that it is for safekeeping and will be returned.
The scam can end up with customers losing hundreds of thousands of pounds, the bank said.
Detailing how the scam operates, HSBC UK said criminals claim to be the bank, police or another trusted organisation and tell victims they need to protect their money and accounts from internal fraud, or that they need to help with a fraud investigation.
The victim is asked to buy gold from a legitimate merchant and retailer. They are then told to hand over the gold to the scammer, posing as a courier, who claims it will be used as evidence and transported for safekeeping.
Customers may be coached by criminals to lie to the bank and to answer questions in a certain way. They may be told to say the purchase is for an investment or a gift.
HSBC UK emphasised that people should take note of scam warnings issued by their bank when making payments.
The bank is contacting nearly two million customers by email with its gold scam warning.
The warning will initially be sent to customers over 65, who are the main age group reported to the bank as falling victim to this type of scam, as well as vulnerable customers.
Gold prices have recently been jumping to record highs, amid wider geopolitical worries and falling interest rates.
HSBC UK said that, in general, it recorded a significant increase in activity by scammers between July and September.
It said the third quarter of this year saw the highest number of investment scam cases recorded over the past year, with twice as many cases in September 2024 as in the same month last year.
The average amount lost to an investment scam is £33,739, it said.
Police and bank impersonation scams have also increased, with the average loss at £20,772 in the third quarter of 2024.
The third quarter also marked the highest number of romance scams seen by the bank over the past year, with an average loss of £31,000.
Meanwhile, September 2024 marked the highest purchase scam activity seen by the bank over the past 12 months. The average purchase scam loss in the third quarter of 2024 was more than £850, HSBC UK said.
Scams at highest level over last year – HSBC UK
David Callington, HSBC UK’s head of fraud, said: “During the last quarter we saw a general increase across the board in scam activity, with a number at their highest level in the last 12 months.
“One thing is very clear: it is not a case of romance scams happening around Valentine’s Day, purchase scams happening on Black Friday, or investment scams happening around Isa season in March – all different types of scams are happening throughout the year, and scam activity looks to be on the rise.
“Scammers are using every trick in the book to hoodwink people to steal their hard-earned cash.”
He added: “Having a general awareness of the different types of scams will help people protect themselves and their friends and family from falling prey to a scammer, especially those emanating from online sources, which make up three-quarters of all APP (authorised push payment) scam losses.”
New rules came into force in October, requiring banks to reimburse victims of bank transfer scams unless the customer has been grossly negligent.
A reimbursement limit of £85,000 has been applied under the rules, overseen by the Payment Systems Regulator (PSR), although banks can choose to go further than this and repay higher amounts.
Three-quarters (76 per cent) of APP fraud cases last year originated from online sources, according to figures previously released by banking and finance industry body UK Finance.
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