BANK FRAUD CRACKDOWN
After our two-year campaign, regulator acts at last ... but the victims STILL cannot be certain they’ll get their cash back and crackdown won’t really start until next year
NEW rules designed to curb the wave of bank customers falling victim to sophisticated fraudsters are too little too late. They will do nothing to help people get back money already stolen from their bank accounts – and where the banks have steadfastly refused to compensate. Fraud is also likely to flourish until the finer detail of the new code is thrashed out and introduced next year.
That is the verdict of many readers of The Mail on Sunday who have responded in droves to our longstanding Stop The Scammers campaign – launched nearly two years ago. A campaign we have returned to on a regular basis ever since.
All have been victims of fraud and most feel they have been hung out to dry by their banks – treated as if they are to blame, kept in the dark over whether they will be compensated and given feeble excuses as to why they will not get back their money.
Even when they have taken their complaints to the Financial Ombudsman Service – an independent arbitrator of deadlocked disputes – they have had to wait months for a response.
Those who have suffered devastating financial losses as a result of banking fraud believe the banks are doing too little to prevent it – waving through five-figure payments even when they catapult someone into overdraft for the first time in their banking lives. This is even though smaller payments have occasionally triggered a text or phone alert from the bank.
They also feel the banks – into which the proceeds of fraud are paid – do little to help victims trace their stolen money. The new code, they say, will do no more than put sticking plaster over the biggest financial crime of the century. The intended code, being developed under the watch of the Payment Systems Regulator, comes on the back of data showing that fraudsters stole more than £500 million from individuals in the first half of this year.
These frauds take on various guises. They include‘ impersonation’ s cams where someone claiming to be an official – for example, from t he Inland Revenue or even the bank – tricks a victim into transferring money. A growing twist on this is ‘computer takeover’ scams – a crime we first reported on in December 2016. This involves someone calling who purports to be from a telecoms company, usually BT. They claim the home’s internet has been hacked and that urgent tests need to be made – work that can only be done via remote access to the victim’s computer. They then proceed to garner sufficient bank information from the target – initiated by the payment of an ‘inconvenience’ refund – to remove money from their accounts. The code’s focus will be on helping victims of ‘authorised push payment’ s cams where fraudsters trick people into giving permission for a payment to be made from their bank account. Some £145 million was stolen this way in the first half of 2018 – with less than a quarter of this sum returned to victims.
Current rules do not require the banks to cover the losses suffered by customers who fall victim to such scams. Under the proposed code, there will be greater flexibility to compensate although it is somewhat wishy-washy with reimbursement dependent upon whether a customer has met a ‘level of care’. In instances where this level of care has not been met by both the customer and bank, the code’s authors have yet to decide what to do.
The code is likely to require the banks to do more to spot scams – for example, using computer algorithms capable of i dentifying unusual payments.
Gayle Rinkoff is sceptical the banks will be more receptive to compensating victims of fraud.
For the past two and a half months, the 45-year-old stylist from North London has battled with NatWest to recover £19,000 stolen from her account by a crook who claimed to work for the bank’s fraud department. Although NatWest has subsequently been in touch with her on two occasions – following pressure from The Mail on Sunday – she is no nearer to getting her money back. She says: ‘I feel abandoned.’
When the fraudster called, he said there had been ‘suspicious activity’ on her account. This was given legitimacy by the fact the number he was calling from matched the NatWest helpline number on the back of her bank card.
She then received a text from NatWest saying someone had tried to add a mobile number to her account, again perpetuating the belief her account was indeed the target of fraud.
The caller, ‘Andrew’, proceeded to give Gayle details of new standing orders that had been set up on her account and a series of pending payments. He then confirmed her account had been ‘suspended’ – a fact she believed when she went online and saw the words ‘account s uspended’. I t was t hen t hat Andrew went for the financial kill – telling her she needed to move money to a new ‘secure’ account. The fraud was complete – £19,000 transferred to an account at Yorkshire Bank. NatWest has told Gayle she must suffer the loss because she authorised the payment.
On Friday, she told The Mail on Sunday: ‘Am I wrong to assume that as NatWest allowed its website to be manipulated it should accept some if not all the blame?
‘Is it wrong to assume someone calling or texting from a NatWest number is genuine? Is it right the bank made no effort to retrieve my £19,000 when I called it 20 minutes after ending my conversation with the impersonator?’
On Friday, the bank said it ‘sympathised’ with Gayle and that her case was still ‘being investigated’ by its dedicated scams team. Under the proposed code, it is unclear whether Gayle would be compensated.
David Allison, from Dunoon, was defrauded out of nearly £8,000 after falling victim to a scammer claiming to be from BT and ringing to sort out an internet speed problem. David, a paramedic, was then offered compensation for the inconvenience. Asked to go online and check if the payment had been received into his Royal Bank of Scotland account, he discovered that £1,100, not £100, had been credited.
The fraudster, frantic, asked David to return the ‘overpayment’. He authorised it, only to discover later that the fraudster had gone on t o withdraw £ 7, 750 f r om hi s account. Despite contacting BT, the police, Action Fraud and the bank, he has had no joy in getting back his money. He says: ‘What annoys me is that the payment pushed me into overdraft – the first time in more than 40 years. Surely that fact alone should have raised suspicions at the bank.’
Again, the subjectivity of the code’s definition of ‘level of care’ means it is unclear as to whether David would be compensated under the proposed new regime.