Na­tion­wide: ‘It’s not our fault you lost £8,700’

The Daily Telegraph - Your Money - - FRONT PAGE - Money,

In the lat­est case of trans­fer fraud, the build­ing so­ci­ety will not take re­spon­si­bil­ity for serv­ing a crim­i­nal. By Amelia Mur­ray

Ex­perts have con­demned the bank­ing in­dus­try for its in­con­sis­tent ap­proach in deal­ing with vic­tims of “trans­fer fraud” – which is now one of the fastest-grow­ing forms of fi­nan­cial crime. The fraud usu­ally in­volves email in­ter­cep­tion or some form of trick­ery, whereby the vic­tim un­know­ingly sends money to a crim­i­nal’s ac­count. In many cases – but not all – where the re­cip­i­ent is proved to be a crim­i­nal, the bank that op­er­ated their ac­count makes good the vic­tim’s loss.

Tele­graph Money re­ported how David Bur­ton and Derek Macken­zie were re­im­bursed by TSB af­ter fall­ing vic­tim to eBay fraud, on the grounds that the bank al­lowed fraud­sters to open ac­counts with false in­for­ma­tion (see box be­low). Now, in a

IT WAS DIF­FER­ENT WITH TSB: THE BANK AC­KNOWL­EDGED ITS ROLE – AND PAID UP

Ear­lier this year two fraud vic­tims, David Bur­ton and Derek Macken­zie, were re­funded by TSB on the grounds that the ac­counts they trans­ferred money into were opened with false in­for­ma­tion.

Mr Bur­ton paid £3,400 to a fraud­ster on eBay for a nonex­is­tent mo­torhome in 2014.

When it failed to turn up he con­tacted his own bank, Bar­clays, but the money had al­ready been cleared from the TSB ac­count.

Mr Bur­ton also re­ported the crime to Ac­tion Fraud, which passed it on to the po­lice for in­ves­ti­ga­tion.

A re­port from Bloxwich po­lice re­vealed that fake de­tails were used to open the ac­count. re­mark­ably sim­i­lar case, Na­tion­wide has re­fused to pay back vic­tim Balazs Kele­men the £8,700 he trans­ferred into a fraud­ster’s ac­count op­er­ated by the build­ing so­ci­ety. Mr Kele­men be­lieved he was buy­ing a BMW.

A po­lice re­port later con­firmed that a false Ro­ma­nian ID card and coun­ter­feit Bri­tish Gas util­ity bill in the name of Con­stantin Ch­escu was used to open the Na­tion­wide FlexAc­count on Jan 10.

The crim­i­nal was ap­pre­hended and in May charged with “fraud in re­la­tion to open­ing ac­counts, us­ing false iden­tity doc­u­ments and mon­ey­laun­der­ing, in re­la­tion to re­ceiv­ing vic­tim’s monies and sub­se­quently with­draw­ing the funds”.

He was sen­tenced to 12 months in prison in July.

Mr Kele­men, 33, made two pay­ments to­talling £8,700 on Jan 23 and 24 to a firm called BC Mo­tors, Fol­low­ing pres­sure from

TSB ad­mit­ted that the open­ing of the ac­count did not meet its “strict anti-fraud re­quire­ments and ID checks”.

It re­funded the £3,400 along with £250 com­pen­sa­tion.

Mr Macken­zie got his money back from TSB on sim­i­lar grounds af­ter he trans­ferred £7,858 to its crim­i­nal cus­tomer for a cherry picker he saw on eBay. A data dis­clo­sure from Devon and Corn­wall Po­lice re­vealed that the fraud­ster was able to by­pass TSB’s sys­tems us­ing a “made up” Na­tional In­sur­ance num­ber.

TSB agreed to re­im­burse Mr Macken­zie the full amount, along with £300 and in­ter­est.

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which turned out to be a fake web­site. He was one of 32 peo­ple who re­ported the com­pany to the po­lice.

When the car failed to ma­te­ri­alise, Mr Kele­men, who lives in Southamp­ton, re­alised the ruse.

But by the time he called his bank HSBC on Jan 31, the money had al­ready been drained from the Na­tion­wide ac­count. Mr Kele­men also re­ported the crime to Ac­tion Fraud, the UK’s cy­ber­crime and fraud re­port­ing ser­vice. De­spite the con­vic­tion, Na­tion­wide re­fused to ac­cept re­spon­si­bil­ity for the fraud­u­lent ac­count. It in­sisted it was not neg­li­gent. How­ever, Richard Emery of fraud con­sul­tancy 4Keys In­ter­na­tional and an ex­pert wit­ness, ar­gued that if the mu­tual had done its due dili­gence “prop­erly” it would have spot­ted the doc­u­ments were fake and the ac­count would not have ex­isted.

He said: “I don’t ac­cept the ar­gu­ment that the doc­u­ments ‘looked all right’. Na­tion­wide has a moral obligation to re­fund the cus­tomer. Es­sen­tially its pro­cesses failed.” A spokesman from UK Fi­nance, rep­re­sent­ing banks, ad­mit­ted fraud­u­lent in­for­ma­tion could be “ex­tremely dif­fi­cult to de­tect”.

Tele­graph Money has long cam­paigned for the banks oper­at­ing crim­i­nals’ ac­counts to take greater re­spon­si­bil­ity for other, in­no­cent users of bank­ing ser­vices.

The Pay­ment Sys­tems Reg­u­la­tor, which over­sees trans­ac­tions, is is­su­ing

a re­port on Nov 7 on this is­sue. Last week Bar­clays be­came the first Bri­tish bank to in­tro­duce pop-up win­dows that warn cus­tomers they may have been tar­geted by fraud­sters when they make on­line pay­ments that ap­pear to be “sus­pi­cious or out of char­ac­ter”.

And on Thurs­day Lloyds an­nounced a new mea­sure that would see its cus­tomers be­ing prompted to an­swer ad­di­tional se­cu­rity ques­tions be­fore set­ting up new on­line pay­ments.

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