‘Fake builder email scammed us for £51k’
Last year there were 43,875 reported cases of “authorised push payment” (APP) scams, where victims are tricked into transferring money to fraudsters posing as lawyers, banks and other trusted authorities. More than £230m was paid to scammers, of which just a quarter was returned to victims.
The Payment Systems Regulator (PSR) is holding a consultation until September to create a plan to reimburse victims of push payment fraud. Until then, as the Stringers have discovered, there is no consumer protection for victims if they are tricked into transferring money to a criminal.
Telegraph Money has long called for banks to take more responsibility for their part in APP scams. We want to see more consistency between banks’ reimbursement policies and better checks to prevent the opening of fraudulent accounts.
Currently, to ensure a payment is sent to the correct account, the bank or building society requires two pieces of information: the unique sort code, which identifies the bank branch, and the account number, which identifies the account held at that bank.
But although the customer name associated with the destination bank account is generally requested when a payment is initiated, it is not used to process the payment or to direct it to the correct account. In other words, you could send a payment to any account with the name Santa Claus as the recipient and it would still go through.
This is due to change when a “confirmation of payee” scheme takes effect. The sender of the money will be asked to confirm the name attached to the recipient account. Experts expect this to reduce APP scams as well as “fat finger” mistakes.
Chris Harris, managing director of Lawyer Checker, which provides fraud prevention services for the legal industry, said: “As the consumer is technically authorising the transfer of the funds, there has been a large question mark over compensation.
“Earlier this year the PSR stated that banks needed to do more to protect against this type of scam. However, they stopped short of stating that banks had an obligation to compensate consumers.”
When Telegraph Money contacted HSBC, it refused to confirm that the account the Stringers paid the £51,000 into had not been set up with false information, or that it had completed strict anti-fraud requirements and ID checks.
The bank would also not confirm that the name on the account in question matched the name on the bank transfer received. A spokesman said: “Where there is alleged fraudulent use of our accounts we take it very seriously and as in this case take the appropriate action.”
Jennifer Scurfield, a solicitor at CG Naylor and spokesman for Richmond Interiors, said: “Our client has a great deal of sympathy for Mr and Mrs Stringer’s position, and is appalled that they have been defrauded in this way.
“However, our client is not responsible for the fraud that has been carried out against them, and has itself suffered loss as a result, in the form of its lost contract with Mr and Mrs Stringer, and the cost of goods that it bought in anticipation of that contract being fulfilled.
“Our client is itself a small business and cannot be expected to bear for them the loss that they have suffered.”
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Mark and Wendy Stringer with their children Sonny, Styler and Poppy in their uncompleted home in Mill Hill, north London