‘I lost £23k. One bank paid, an­other didn’t’

The Daily Telegraph - Your Money - - MONEY - Sam Mead­ows

A new code is meant to give scam vic­tims cer­tainty, but even the banks that wrote it in­ter­pret it dif­fer­ently. By Mar­i­anna Hunt

Vul­ner­a­ble fraud vic­tims face dra­matic dif­fer­ences in treat­ment depend­ing on where they bank, de­spite the sup­posed im­ple­men­ta­tion of a stan­dard­ised rule book on re­funds. Faced with the grow­ing threat of bank trans­fer fraud, which led to losses of £145m in the first six months of 2018, most of which was not re­turned to vic­tims, the in­dus­try has been work­ing on a code aimed at giv­ing cer­tainty on when a con­sumer will get their money back.

Al­though not due to come into force un­til early next year, it had been un­der­stood that the banks that ac­tively helped to shape the new code would work to­wards im­ple­ment­ing the rules im­me­di­ately fol­low­ing the pub­li­ca­tion of the first draft in Septem­ber.

But Tele­graph Money has dis­cov­ered that banks that sat in on the meet­ings to shape the code are still tak­ing rad­i­cally dif­fer­ent ap­proaches to re­fund­ing cus­tomers who could be vul­ner­a­ble.

An 84-year-old Tele­graph Money reader, who wished to re­main anony­mous, lost £23,000 when scam­mers pos­ing as her bank’s fraud team con­vinced her to drive to her two lo­cal banks and send money to a sup­pos­edly “safe” ac­count. She said a well-spo­ken man warned her that her bank ac­counts had been breached by crim­i­nals and that she would need to se­cure her funds. She drove to branches of NatWest and Hal­i­fax and trans­ferred £8,000 and £15,000.

“I went home re­lieved that I’d saved my money and had no idea I’d been lied to un­til I ex­plained to my daugh­ter what had hap­pened three days later,” she said. “By the time I re­alised, the money had al­ready dis­ap­peared from the other ac­count.”

The in­ci­dent came just a year af­ter the death of her hus­band of 61 years. She said: “They caught me at a raw mo­ment. I was very vul­ner­a­ble.”

The draft code of­fers spe­cial pro­tec­tion to vic­tims who could be par­tic­u­larly vul­ner­a­ble to fraudsters and it makes spe­cific men­tion of be­reave­ment.

De­spite this be­ing a com­mon type of scam, this reader said staff at both banks asked her only “one or two ques­tions” and NatWest did not even ask her if she had re­ceived a phone call telling her to trans­fer money.

Fol­low­ing Tele­graph Money’s in­volve­ment, Hal­i­fax agreed to re­fund her the en­tire £15,000. A spokesman said ev­ery case was re­viewed in­di­vid­u­ally but added: “In this case it’s clear that our cus­tomer was in a vul­ner­a­ble sit­u­a­tion, which led to her be­ing duped by crim­i­nals. For this rea­son we have pro­vided a full re­fund.”

How­ever, NatWest said it was com­fort­able that its staff had fol­lowed the cor­rect pro­ce­dures and would not be re­fund­ing the £8,000 lost.

Both RBS, NatWest’s par­ent com­pany, and Lloyds Bank­ing Group, which owns Hal­i­fax, sit on the steer­ing group tasked with de­vel­op­ing the re­im­burse­ment code.

Al­though not yet bound by the rules, Tele­graph Money un­der­stands that banks in the group had “in­di­vid­u­ally com­mit­ted to start work to­wards im­ple­ment­ing the stan­dards of the draft code”. Yet dif­fer­ent ap­proaches are still be­ing taken.

A spokesman for NatWest said: “As this reader au­tho­rised the pay­ment from her ac­count fol­low­ing ques­tion­ing from our branch staff as to the le­git­i­macy of the pay­ment, un­for­tu­nately we would not be in a po­si­tion to re­im­burse her for her loss.”

Gareth Shaw of Which?, the con­sumer group, said: “While we wait for the code to be fi­nalised we hope that banks – specif­i­cally those that helped shape the code – will live up to their com­mit­ment and be­gin to im­ple­ment th­ese im­por­tant mea­sures in­tended to pro­tect con­sumers against the wors­en­ing prob­lem of bank trans­fer scams.

“Peo­ple are los­ing life-chang­ing sums ev­ery day, so th­ese mea­sures to pro­tect and re­im­burse all those who fall vic­tim through no fault of their own can’t come soon enough.”

Conor Burns, the Con­ser­va­tive MP for Bournemouth West and chair of the par­lia­men­tary group on scams, said: “This need not be a com­pe­ti­tion be­tween dif­fer­ent banks about how they treat cus­tomers who have fallen vic­tim. There should be a con­sis­tent pol­icy that puts the pro­tec­tion of cus­tomers from fraudsters at the heart of bank pol­icy.

“Front-of-house bank staff need to be trained to spot the very ob­vi­ous cases of po­ten­tial fraud. When a cus­tomer in their 80s comes into a branch and asks to trans­fer thou­sands of pounds, which is com­pletely out of sync with all pre­vi­ous trans­ac­tions, bank staff should take that cus­tomer aside and seek to es­tab­lish what’s go­ing on.”

More than 96pc of cases re­ported to Ac­tion Fraud, the na­tional re­port­ing cen­tre, go un­solved, an in­ves­ti­ga­tion by Which? found ear­lier this year.

Mean­while, the meth­ods used by scam­mers are be­com­ing ever more elab­o­rate and con­vinc­ing. Tele­graph Money has re­ported on cases in­volv­ing scam­mers im­per­son­at­ing fi­nan­cial ad­vis­ers and so­lic­i­tors to steal pension pay­ments and house de­posits, as well as us­ing the names of le­git­i­mate com­pa­nies to sell fake goods on­line.

The new rules on re­im­burse­ment, which will re­main vol­un­tary, are due to be en­forced from early next year.

reader (far left) shows the im­pact of this type of fraud, which led to losses of £145m in the first six months of the year alone.

With­out tighter rules, the code risks fail­ing vul­ner­a­ble vic­tims. We de­manded that banks should foot the bill for re­funds, not con­sumers, and that firms that al­low fraudsters to open ac­counts with fake pa­per­work should be held li­able.

We also called for strict rules to force banks to act quickly af­ter vic­tims re­port a case of fraud and for the estab­lish­ment of a speedy com­plaints process.

Hun­dreds of read­ers shared their opin­ions with us. This was in­valu­able and we in­cluded your voices in our re­sponse to the con­sul­ta­tion.

Most tellingly, very few of you sup­ported the in­tro­duc­tion of a charge on bank trans­fers – one of the pro­posed fixes to the ques­tion of who will fund


Many sup­ported new rules to make banks cross­check the name on the re­cip­i­ent ac­count, known as “con­fir­ma­tion of payee”.

Some of you sug­gested de­lays on large bank trans­fers to give vic­tims the chance to re­think their ac­tions, while oth­ers ad­vo­cated stricter rules on the open­ing of bank ac­counts.

Jen­nifer Reed told us: “If a bank al­lows an ac­count to be opened by a fraud­ster with fake ID then I think the bank should be li­able for any re­sult­ing fraud.”

Phil Turn­bull said a 24-hour de­lay on large bank trans­fers could help pre­vent fraud.

A reader from Lin­coln, who did not want to be named, said the only way to force banks to act would be to make them li­able for crim­i­nal charges if they failed in their duty of care to cus­tomers.

It’s been more than two years since Which?, the con­sumer group, raised a “su­per­com­plaint” on trans­fers and fi­nally the wheels are in mo­tion to com­bat the prob­lem. Un­til a work­able code is fi­nalised, we will con­tinue to be in the cor­ner of scam vic­tims.

NatWest re­fused to play ball and re­fund a reader, left, who lost thou­sands in a scam

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