I’m With the Banks on this One

Fraud. That is push payment fraud. Apparently, the banks aren’t doing enough.

It started with a phone call to their home landline – and ended with a police stakeout and panic alarm being fitted in their Cambridgeshire home. A retired couple who lost £43,000 to persistent and expert fraudsters have become the latest victims to complain that banks’ voluntary fraud code promising refunds to victims is worthless.

I am aware of one of these frauds that happened recently. As it is currently subject to investigation, I can’t say much more. Suffice to say, those of us affected are furious that the person concerned fell for this one. There is no reason to get taken in by a push payment fraud. None at all. The banks make it clear enough – they never call you asking you to move money about. Never. Under any circumstances. So when people fall for it, it is their own fault. Yes, I do understand that there are some vulnerable people who get taken advantage of, but as in the case I mentioned, these are mostly people who should damned well know better.

In May last year, the UK’s biggest banks all agreed to abide by a new code that would see the victims of what is known as “authorised push payment fraud” refunded in full. Victims duped into sending money to an account operated by criminals were to be refunded, where they had been the victim of a complex fraud – a so-called no-blame scenario.

And who pays? Ultimately we do in one form or another. And there is someone to blame – apart from the fraudster of course. The person who picks up the phone and gets talked into agreeing to move money around, despite the banks having stated time and time again, that they will never do this, just as they never send a courier to your house to collect your debit or credit card. Likewise HMRC will never contact you by anything other than a letter to discuss a tax refund. The information is so out there, you can’t miss it, so if you do, whose fault is that? The bank? HMRC? Or you for being foolish enough to fall for the sweet talk of a confidence trickster?

The banks never, never, never call you and ask for sensitive details and never, never, never ask you to move money about because of suspicious activity on your account. They can, after all, just freeze it themselves. It really doesn’t take much common sense to avoid falling for these scams. Yet people do. And having fallen for it, they expect someone else to pick up the tab.

At the time the code was hailed as a breakthrough as before then the banks were routinely blaming fraud victims, and turning down claims for refunds on the basis that people had been grossly negligent.

If, despite having been warned numerous time, people give money to fraudsters, they are grossly negligent.

Back in November, the Rosses took a call on their home landline from someone claiming to be a bank fraud investigator, who told them that their life savings were at risk of being stolen.

The couple were told staff could only discuss the details with them if they called their bank’s fraud team by phoning the number on the back of their bank cards.

But the scammers were able to keep the line open during this process, using fake dialling tones, phones ringing in series, and even phone transfers, so that the elderly couple believed they had reached call centres at Halifax and Santander.

Okay, in this case, there is a get out. But, again, the trick of keeping the phone line open is well enough known and the advice is to use a different phone line or leave it for ten minutes or so. Or even pop into the branch – assuming there is one still. But, and this is the key here, the banks simply do not behave like this. And unless you have been doing something with the money, the likelihood of it being stolen is pretty remote, frankly. But, yes, in this case, it was a little more complex and so I can understand why they fell for it. But:

They were told that the banks’ own employees were under investigation, and bosses needed their help to catch them.

Banks don’t do this. They simply don’t. That’s the red flag, right there.

They were instructed not to discuss the matter with family or anyone else, and in particular the staff in the banks in question.

And another one. Again, a bank would not do this. Even if you fell for the phone trick, by the time it’s got this far, those bells should be clanging and you need to hang up. Usually at some point in the process, it becomes obvious that this is not a genuine call. Usually within the first few seconds. However, even the more complex frauds give themselves away. Only in flights of fantasy would a bank seek assistance from a customer in catching corrupt employees. The common sense response to this scenario would be to ask why the bank has not involved the police?

“She believed these accounts were safe accounts set up by the investigators. My father was similarly coerced to withdraw £5,000 cash from a local Santander branch, and to hand it over to a courier for ‘fingerprint analysis’. They were both warned on approaching each bank that staff would question them in detail about scams. They were instructed to ignore this, although ironically they were not questioned in any sort of detail at all. This was in spite of the fact that these payments were completely out of keeping with their normal payments history.”

Now, that does surprise me a little. I’ve been questioned when I’ve made unusual transactions – buying something from abroad for example or a large withdrawal. Nothing too intrusive, just a double-check and I’ve been fine about it, because they were exercising due diligence. If they didn’t in this instance, then there is some blame to apply, but not all of it by any means. But, again, and I know I’m repeating myself, the bank will never ask customers to do any of these things. Not only do they not do it, they have gone to great lengths to advertise the fact that they do not do these things.

However, this case raises difficult questions. To what extent can the banks be liable in situations such as this? Despite the police’s rare involvement in a bank fraud case, both Halifax and Santander argued that the couple were to blame.

I agree with the bank here. Yes, sure, they could have asked some questions regarding the unusual transactions and should accept some responsibility for that failure, but overall, the responsibility rests with the customer not to hand money over to complete strangers and to not fall for fantasy tales of corruption where the public are never asked to do things that are a matter for the police.

A Halifax spokesman says: “We have a great deal of sympathy, and a decision not to provide a refund is never one which is taken lightly. Sadly our customers did not take sufficient steps to verify the identity of the cold-caller, and also ignored a specific warning from our branch about exactly this type of scam.

That’s it, right there. They were warned.

“My parents were scam aware. If I did not know that scammers could fake dialling tones and bank call centres, how could they be expected to?” she says.

Well, I know about it and have done for some time. It’s not exactly a secret. And as I’ve pointed out, since the original call there were enough red flags to alert the mark. They should at that point have gone into the branch, but they didn’t.