Introduction
Online payments have transformed the way we shop and transfer money – but they’ve also created new opportunities for fraud. In fact, global payment fraud losses are estimated to exceed $40 billion annually. If you’ve seen suspicious activity or believe you’ve been defrauded, acting quickly is critical.
This guide explains why fraud happens, what steps you should take immediately, and how Banking Circle supports investigations.
Why Does Fraud Happen in PSP Ecosystems?
Payment Service Providers (PSPs) act as intermediaries between merchants and banks, enabling fast and secure transactions. However, fraud can occur when:
- A merchant using a PSP is fraudulent.
- A PSP fails to perform proper checks on its clients.
- Scammers exploit gaps in the payment chain.
What Is Banking Circle’s Role With PSPs?
Banking Circle is a regulated business-to-business (B2B) bank that provides payment infrastructure to PSPs – not individuals. PSPs use our services – such as virtual IBANs and cross-border payment rails – to process transactions for their customers.
This means:
- Banking Circle enables PSPs to move money securely and efficiently.
- We do not have a direct relationship with individual payers or merchants.
- We cannot block funds or issue refunds because we only process payments on behalf of PSPs.
If our name appears on your bank statement, it simply means your PSP used Banking Circle’s system to process your payment.
Step 1: Contact Your Bank or Payment Processor
Your PSP or account holding institution is responsible for your account and funds. They are the first point of contact for resolving issues.
- Why this matters: Banking Circle cannot block transactions or issue refunds because we only process payments for businesses.
- Action: Report the issue to your bank or payment processor as soon as possible.
Step 2: Report the Fraud to the Law Enforcement
If you suspect fraud, file a report with your local police or local fraud reporting agency in your jurisdiction.
- Why this matters: Law enforcement can request transaction details from Banking Circle to support their investigation.
- How to proceed: Ask the police to send an official request to reportfraud@bankingcircle.com. We will provide the necessary information directly to them.
Step 3: Gather All Relevant Information
When contacting your PSP or the police, be sure to have available:
- Transaction details (date(s), amount(s), reference number(s))
- Screenshots of your bank statement
- Any communications held with 3rd parties where you have been instructed to make payment.
This will help speed up the investigation.
How Banking Circle Supports Investigations
Banking Circle operates under strict compliance standards and is regulated by the CSSF in Luxembourg and additional regulators found here: Where the PSP utilising the VIBAN solution has a relationship with Banking Circle:
- We forward your case to the PSP that uses the virtual IBAN linked to your transaction.
- We cooperate fully with law enforcement and regulatory authorities.
- We cannot block funds, refund money, or provide transaction details directly to individuals.
Tips to Prevent Fraud in the Future
1. Check Who You’re Paying
Remember, Companies can be created to look authentic and legitimate including websites and support teams. By conducting your own research on these firms, you may be able to avoid a scam:
- Make sure the company or payment service is real and trusted. See our ‘Verifying a Company’s Legitimacy’ section below.
Check for: - A proper website, contact details, and reviews from other customers.
- A privacy policy and company history, which can provide insights into the company’s longevity, strategy and objectives
- Company registry and / or licencing details; this should be prominently displayed on the website, often found in the privacy policy or terms and conditions.
- When making online purchases, review the company’s refund and exchange policy.
- Ensure the website url begins with “https://” and look for a padlock or key symbol in your browser to confirm a secure connection.
- Investigate social media presence of the business. Most reputable companies, especially those selling to consumers will maintain active profiles on platforms like facebook, instagram, or X (formerly twitter).
- Be cautious if a website’s domain name references a well-known brand but doesn’t match the official brand’s website.
- If something feels off, stop and check before sending money.
2. Use Secure Payment Methods
- Choose payment options that show extra security checks, such as 3D Secure (you’ll see things like “Verified by Visa” or “Mastercard SecureCode”).
- Avoid sending money through direct bank transfers to people or companies you don’t know well.
- If the payment uses Confirmation of Payee or similar and the details do not match, pause and seek further guidance from an independent party. Scammers will convince you to proceed, always take time to verify the information.
3. Be Careful With “Too Good to Be True” Deals
- Very low prices, uncharacteristically high interest returns, artificial intelligence investments allegedly endorsed by public officials or time sensitive offers can be a warning sign.
- Scammers often try to rush you so you don’t have time to think.
- Check the website address carefully – fake sites often look similar to real ones but have small spelling changes.
4. Keep an Eye on Your Bank Account
- Turn on alerts for payments if your bank offers them.
- Check your statements regularly for anything you don’t recognise.
- If you see something strange, contact your bank or payment provider right away.
5.Extra Tip for Businesses
If you run a business, help your customers stay safe:
- Share clear fraud prevention tips.
Offer secure payment options and make them easy to find. - Use strong checks (like KYC and monitoring) to keep your payment system safe.
Verifying a Company’s Legitimacy
There are resources available online for checking the legitimacy of Companies, these include:
Quick Checklist
- Contact your account holding Bank, PSP or merchant immediately.
- Report the fraud to the police or equivalent local law enforcement agency.
- Share transaction details with both parties.
- Ask the police to email reportfraud@bankingcircle.com for official requests.
Conclusion
Fraud can be stressful, but taking the right steps quickly can make all the difference. Banking Circle is here to support investigations and ensure the right parties receive the information they need.
