Banks’ lax checks are ‘enabling scammers’

Despite a new code of conduct it is still too easy for banks that allow criminals to open or use accounts for fraudulent purposes to avoid compensating victims, experts have warned.

Authorised transfer fraud, where people send money to scammers believing they are paying for legitimate services, accounted for losses of £354m in 2018. The industry has drawn up a code of conduct for refunding victims.

Banks that receive stolen money are liable under the code, but critics srgue the rules are poorly defined. Jack Warwick, who runs Action Scam, said these recipient banks are enablers of crime. “If fraudsters could be stopped from getting accounts this problem would not exist,” he said.

Rob Gardner, 49, a truck driver from Kent, lost £3,900 he sent to a

Pensioners fell prey to identity fraud in 2018, according to crime database Cifas fraudster posing as an online car salesman in 2017. When the vehicle did not arrive and he realised he had been scammed, he reported it to his bank and Nationwide, the receiving bank. The money was already gone.

He was initially told by Nationwide that the recipient account had been “opened fraudulently”, but the building society later denied this. It said the account had been opened correctly, with proof of identity and address, and paid Mr Gardner £200 as an apology for the error.

Telegraph Money has previously reported on a similar case involving Nationwide in which Balazs Kelemen lost £8,700 he sent to a Nationwide account operated by criminals. He threatened the bank with court action and Telegraph Money understands Mr Kelemen has agreed a settlement.