Banks that let fraudsters open accounts won’t refund us
The number of accounts taken over by criminals has risen but victims are still denied compensation, says Amelia Murray
Banks that allow criminals to open or take over accounts are refusing to compensate victims of fraud, even as official figures show a rise in scams. Telegraph Money has been campaigning for banks to take more responsibility when vetting account openings and compensating victims of scams if their account verification processes fail.
No data exists on how many criminal accounts are opened but figures from Cifas, the fraud prevention agency, show that the problem of “money mules”, where people let fraudsters use their accounts to store and transfer stolen funds, is growing.
There were 24,798 “misuse of bank account” cases between January and September this year, a 50pc rise on last year. Incidences of young people being “money mules” saw a 75pc increase compared with the year before and twice the number four years ago. Experts say banks should be doing much more to prevent these crimes.
Retired police officer Lesley Gladstone transferred £3,695 to an eBay seller, who turned out to be fake, for a Toyota Land Cruiser that never arrived.
Ms Gladstone, 55, made the payment to a TSB bank account on March 24 this year after speaking to the fraudster on the phone. The seller said he was out of the country and was selling his late brother’s car.
Fraudsters on eBay will offer many excuses as to why the vehicle cannot be viewed, while genuine sellers will generally arrange for someone to act on their behalf.
Ms Gladstone said that days after transferring the money she became suspicious when she read about a similar scam online.
She said she felt “angry and stupid”, having bought hundreds of items on eBay before. However, she said she was going through a “traumatic time”, as her son-inlaw was recovering from a serious injury following an accident and her daughter was unwell with stress.
When the vehicle failed to show up, Ms Gladstone’s husband called their bank, RBS. Action Fraud, the UK’s cybercrime reporting service, was also alerted. The case was passed to the Metropolitan Police, which discovered the fraudsters had used multiple accounts that had been opened with fraudulent identity cards and false details.
In another case, Keith Faulkner, who fell victim to an online romance scam, also discovered he had transferred money to a fraudster’s bank account that was opened using bogus information – this time with Lloyds.
Mr Faulkner, 72, began talking to an “attractive American woman in her 40s” on a dating website in 2013.
After chatting for some months, the person told him they had “several million dollars” held in Amsterdam that would cost £35,000 to release. They said they had inherited the money after the sale of land in Nigeria.
Mr Faulkner, from Basingstoke, did not have the full amount, but agreed to transfer £30,000 to the criminal’s Barclays account in July 2013.
Barclays flagged the payment as suspicious when the fraudster immediately withdrew £17,000. It could not recoup these funds but transferred the remaining £13,050 back to Mr Faulkner.
Mr Faulkner, whose wife died 15 years ago when his son was 12, admitted he was “emotionally involved” with the fraudster and continued to be in contact.
“They draw you in and your emotions take over, especially if you’re on your own,” he said.
Months later, he was persuaded to transfer the remaining £13,050 to a Lloyds account he believed belonged to a “middleman” who would help release the funds.
A recent police investigation revealed that these accounts had been opened using just a provisional driving licence and that the suspect did not live at the given address.
Neil Hare Brown, the founder of Storm Guidance, which advises businesses on cyber risks, said it was easy for fraudsters to open accounts in the UK.
He said: “Banks have a look at the documents, tick the box and that’s it.
“It’s not good enough. What’s the
‘Banks must do more to protect people from losing life-changing amounts of money’