Bank Fraud – do you really think you’re too smart?

You’d have to have been living under a rock not to have heard of bank fraud. And like most people, you probably receive  numerous emails inviting you to ‘check your refund’ with HMRC or various banks, which you are smart enough to ignore. But if you think you are safe, think again.

Fraudsters are using much more sophisticated methods these days and even the brightest people are getting duped.

We were contacted today by an intelligent, respectable guy who, probably like me and you, thought he was too wise to be taken in. But that’s exactly what happened and he’s now significantly out of pocket.

He was called earlier this year. The number on his phone showed ‘NatWest Fraud’. He answered and was told about fraudulent activity on his account amounting to around £11,000. He was told that his accounts had all been suspended and he was asked to go online to check this. When he did, his accounts were indeed all marked ‘Suspended’. The caller referred to various legitimate entries in his account, which reassured him further that the caller was genuine.

He was told that he would be talked through a process whereby current funds would be transferred into a new ‘holding’ account in his name and they arranged a meeting at his local bank for two days later. All this time, he was convinced that he was talking to his own bank, the call having come from ‘NatWest Fraud’.

He was walked through the process of creating the payment to the account (which he was told was computer-generated so it could not be hacked). He made the transfer.

He turned up at his bank two days later to find that he had been the victim of a scam. The ‘holding account’ in his name was in fact a Barclays account. Barclays were contacted and the monies had already been taken from the account.

NatWest are refusing to refund him as he authorised the payment – it is what is called a ‘push’ payment whereby it is specifically done by the accountholder. ‘Pull’ payments, where the scammer takes the money themselves’ usually have to be refunded by the banks, even if the funds have vanished. Barclays state that they have no duty to refund him and in any event, the account is empty.

The upshot is that he is currently £13,000 out of pocket and his options are limited. We are exploring these with him.

The scam is clever for various reasons:

  1. They managed to ‘call’ from NatWest’s own number. The bank are unable to confirm how this was done;
  2. They clearly already had access to his account but were shrewd with how they then proceeded – see 3 below;
  3. They persuaded him to make a ‘push’ payment, knowing that this would mean that neither NatWest or Barclays would agree to refund him – without having to  refund him, the banks would them expend much less effort in trying to trace the scammers, as opposed to if they were out of pocket themselves;
  4. Although he felt comforted by the fact that he was transferring money into an account in ‘his’ name. Again, the scammers would have known that when you make an online transfer to someone, banks do NOT actually check the name. They just check the sort code and  the account number. So the account it went into was never in his name at all.

Still think you wouldn’t fall for it? Our client is far from alone. Read this almost identical story:

https://www.dailymail.co.uk/news/article-5755585/Victim-sophisticated-banking-scam-reveals-tricked-losing-4-000.html

‘Authorised Push Payment fraud’ is one of the fastest growing frauds with 19,370 reported cases in the past six months. It is estimated that £101.2 million has been transferred to fraudsters in that period. The banks and the Financial Ombudsman are behind the curve on this. They realise that fraud methods are evolving but recognising an issue and finding ways to deal with these are very different things.

If you have any suspicions at all or receive any kind of similar call, simply hang up and go and see your bank (if it hasn’t been turned into a wine-bar). The consequences otherwise can be devastating.

If you’ve been a victim and want to discuss your options, please get in touch with us.

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