Secret fraudsters’ BLACKLIST
Banks know the names of rip-off firms. But they won’t share . . .
BANKS are building up secret blacklists of thousands of unscrupulous firms to prevent customers losing their hard-earned cash.
The lists include copycat firms which charge excessive fees for official services such as passports, driving licences and European Health Insurance Cards.
Others trick shoppers into signing up for costly subscriptions for diet pills or antiwrinkle creams, or offer too-good-to-be-true investment opportunities. Should customers attempt to make a card payment to one of these black-listed companies it will be blocked and investigated further.
Now, banks and building societies are calling on customers to help grow their directories of rogue businesses — although these lists will not be made available to the public.
Many customers who fall foul of these firms feel too ashamed to come forward or put their experience down to bad luck and move on. But this means the companies avoid detection and can go on to target more victims. So by reporting these incidents to your bank you can help protect others — and you may even get your own money back. Each bank has compiled their own blacklist, which is typically based on payment disputes raised by account holders. Britain’s biggest building society, Nationwide, says it blocks payments to more than 1,000 companies.
Some are what Nationwide call ‘legal scams’. These can include websites that offer free trials for beauty products but fail to make it clear shoppers will automatically be signed up for expensive subscriptions.
Others are companies that charge fees to steer customers to a service they could get cheaper or free by going direct. Some may push unnecessary insurance such as cover for a satellite TV box you have owned for a year, for example.
Nationwide also blocks payments to illegal companies such as investment firms identified as scammers by the financial watchdog. Nationwide’s senior fraud manager Martin Salter says: ‘ We collect details about firms which are misleading and do not offer a good service.
‘Many on the list are running legal scams and because transactions are often of low value they hope people will write off the payments. However, if we receive multiple complaints about a merchant we can block future payments to these firms.’
Mr Salter adds that the building society would not block payments to a company based on one call and will carry out a series of checks.
He says: ‘Once alerted, we can go back two years and look at all payments made to that merchant. A tell-tale sign that a company is operating a scam is when the account holder cancels their card after making a payment to the firm to stop them taking future sums.’
One problem, however, is some owners of rogue firms try to avoid detection by winding up their company and setting up a new one.
Santander says it also identifies scam companies via customer queries, complaints and disputes over card payments.
The bank says customers may have paid for an item they did not receive or noticed more money leaving their account than expected as part of a subscription.
Its blacklist includes some photography and modelling agencies, ‘free trial’ merchants, timeshare sellers, firms selling computer software and security packages as well investment companies. Lloyds Banking Group, which includes Halifax and Bank of Scotland, feeds the information it receives from customers into a fraud prevention system.
Paul Davis, retail fraud director at Lloyds Banking Group, says: ‘Every transaction a customer makes is given a score between 0 and 1,000. If it is over a certain amount, say for example 500, we would consider it risky and block it.’
Mr Davis says about 1 pc of payments are registered as high-risk.
He adds: ‘Customers can make a real difference when it comes to helping us in the fight against fraudsters. It is vital that they let us know of any payments on their statements that look suspicious.’
Francis Green, 80 from south Hertfordshire, would have lost £89 if Bank of Scotland, part of Lloyds, had not stepped in to block a payment earlier this year.
She had seen an advert online last December for a free 30-day trial of slimming pills and paid by card for the £3.50 postage cost.
In January, after the pills arrived, Francis received a call from her bank telling her it had stopped an £89 payment to the firm. Francis, a retired public relations executive, says: ‘There was no mention of £89. I called the company and it said if I did not notify it after so many days of receiving the pills, it meant I had agreed to a subscription.’
If customers notice a transaction on their statement they do not recognise, or dispute, they should contact their debit or credit card provider and make what is known as a ‘chargeback’ request.
The card provider is then obliged to refund the money you lost while it investigates. If it finds the merchant has breached a contract with you, you will be permitted to keep the refund. If it finds the merchant has fulfilled its responsibilities or not acted unfairly, the bank could claw the money back.