Banks Why is it so hard to stop the fraud­sters?

TSB was warned about a scam ac­count – but al­lowed it to re­main open and de­fraud one per­son out of £3,600, al­leges fraud fighter ‘Buster Jack’. How­ever, new FCA rules could help vic­tims. Miles Brig­nall re­ports

The Guardian - - MONEY -

They are a close-knit band of anonymous fraud fight­ers, who cru­sade for jus­tice for vic­tims of on­line crime – and spend much of their time “bait­ing” and catch­ing the crooks. But what in­fu­ri­ates “Buster Jack” and his se­cre­tive col­leagues is when they warn a bank about a fraud – such as iden­ti­fy­ing an ac­count used by crooks – and the bank fails to act.

Ac­cord­ing to “Jack”, he con­tacted TSB about an ac­count at the bank that was be­ing used by a scam­mer to laun­der funds. Yet three days later some­one was per­suaded by a fraud­ster to pay £3,600 into the ac­count – and has not been able to re­cover the money.

“He had seen an Ikonoskop cam­era on the Craigslist web­site and was per­suaded to pay for it by bank trans­fer rather than PayPal. The cam­era didn’t ex­ist and he re­alised he’d been scammed the fol­low­ing day, and called his own bank but they said there was noth­ing they could do – the money was gone.”

The vic­tim con­tacted Jack, who checked the records of all the ac­counts that his group had un­cov­ered, only to dis­cover that it was on his list.

“One of my team had tricked a scam­mer into giv­ing him his bank de­tails,” he says. “The scam item on eBay was a clas­sic car: a Ford Es­cort RS2000 and pos­ing as a buyer he had been able to get the TSB ac­count num­ber be­ing used by the thieves.

“Our records showed that we had re­ported to TSB that the ex­act same ac­count was be­ing used fraud­u­lently three days ear­lier.

“This was the 79th time that I had sub­mit­ted a fraud alert to TSB, so they were very fa­mil­iar with me by then – and yet the bank did noth­ing.

“Gen­er­ally when we re­port an ac­count in this way the bank freezes it within 10 min­utes.”

Buster, who has taken on the case on a “no win, no fee” ba­sis, says TSB has re­fused to re­fund the in­di­vid­ual.

A TSB spokesper­son said: “Com­bat­ing fraud is a top pri­or­ity at TSB. We work ex­ten­sively with law en­force­ment, as well as in­dus­try bod­ies, to bring fraud­sters to jus­tice and we’re al­ways on the look­out for sus­pi­cious ac­tiv­ity. When the fraud was iden­ti­fied, we took the rel­e­vant steps to close the ac­count down.”

One of the ob­sta­cles fraud vic­tims en­counter is that if their money is sent to an­other bank, their own bank of­ten says it can’t look into it.

But un­der new pro­pos­als from the City watch­dog last week, the bank that is the re­cip­i­ent of stolen funds will now be forced to deal with vic­tims, and if the vic­tim is un­happy, they can take the bank to the om­buds­man.

In Septem­ber, the Pay­ment Sys­tems Reg­u­la­tor (PSR) will re­veal in what cir­cum­stances banks will have to re­im­burse those who have lost out, which it is hoped will lead to bet­ter se­cu­rity mea­sures.

In re­cent years Guardian Money has fea­tured a num­ber of what are called “au­tho­rised push pay­ment” fraud cases. In some cases, emails are in­ter­cepted and the vic­tim thinks they are mak­ing a pay­ment to a friend or trusted per­son. Last year an Es­sex cou­ple lost £120,000 af­ter send­ing the money to what they thought was their so­lic­i­tor’s bank ac­count. It emerged that emails ask­ing for the house pur­chase de­posit to be paid had been hacked and they paid the money into an ac­count that was sys­tem­at­i­cally emp­tied of £20,000 in cash every day.

Cam­paign­ers have long called for the ac­count name to be part of the bank trans­fer process. Cur­rently you can put “Mickey Mouse” into a bank trans­fer re­quest and the pay­ment will still go through.

It has been ar­gued that if a con­sumers could see the ac­count holder’s name when mak­ing a trans­fer, this would stop a large per­cent­age of these frauds.

In Septem­ber 2016, con­sumer body Which? lodged a “su­per­com­plaint” with the pay­ments reg­u­la­tor, say­ing that vic­tims of the scams did not re­ceive suf­fi­cient pro­tec­tion, and the reg­u­la­tor is now work­ing on ways to set up a “con­tin­gent re­im­burse­ment model”. It is likely that banks that have not in­tro­duced payee con­fir­ma­tion could be forced to re­fund vic­tims, but only where the con­sumer can show that they were not reck­less.

PHO­TO­GRAPH: NA­TIONAL MO­TOR MU­SEUM/ HER­ITAGE IM­AGES/GETTY IM­AGES

‘Fraud busters’ got hold of the ac­count num­ber used by scam­mers sell­ing a Ford Es­cort RS2000 on eBay

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