APP fraudsters target the vulnerable

Scammers are clever, gaining your trust and making you believe transferring money from your bank account is the right thing to do.

Be wary of anyone:

• Contacting you out of the blue
• Asking you to share personal information
• Getting you to transfer money to an unknown beneficiary
• Putting pressure on you to act quickly
• Managing online accounts on your behalf

These are all red flags, and you might be being scammed!

After gaining her trust, the scammers in this case asked the victim to transfer large sums of money on two different occasions, instructing her to give false reasons for the transfers to her bank, Northern Bank Limited. The bank asked a series of questions about the payments and was satisfied with her answers. The payments were made, but shortly afterwards, the lady in question suspected she’d been the victim of a scam, losing a total of £45,000.

The victim’s bank conducted an investigation and concluded that they would not refund any of the lost money. They said that she had approved the bank transfers herself, so only she was to blame, as set out in the Payment Services Regulations 2017. It looked like her money might be lost.

At a time when people are feeling vulnerable, embarrassed and angry, they might prefer to brush the matter aside, accept their losses and put it down to experience. But help is out there.

After making a complaint about the bank, an Investigator from the Financial Ombudsman Service (FOS) took on the case and concluded that the bank should have done more to protect their customer. They should have regarded the payments as out of character and unusual and questioned the lady in more detail. The bank disagreed and said that they had done everything to give her the opportunity to speak fully about the money and to who it was being transferred. The matter remained unresolved.

In order to resolve the dispute, between the lady and her bank, the Ombudsman stepped in to make a final decision. It was not disputed that the lady authorised the two payments. But she had been tricked into making those payments, believing her accounts were at risk from fraud.

Banks have to abide by codes of practice and be responsible for keeping their customers’ money safe. The Ombudsman concluded that the bank should have been monitoring her accounts and payments, with particular regard to money laundering, terrorism and fraud. They should have had systems in place to look for unusual transactions and taken steps to stop, delay or question such payments.

At the end of the day, banks are more familiar with the type of fraud and scams described here than their customers are. The customer was fully refunded and compensated for the interest she lost out on when the money was not in her account.

In upholding the scam victim’s complaint, the Ombudsman, James Kimmitt said:

“It’s clear that she wasn’t familiar with this type of scam, so she took the requests from the scammers at face value. I don’t think she was negligent in failing to recognise that these requests weren’t legitimate. Overall, I’m persuaded that Northern Bank should’ve done more to protect Mrs M from the risk of financial harm due to fraud. If it had done so, I’m satisfied it would’ve prevented her from making these payments to the scammers.”

Sarah Spruce, head of the Authorised Push Payment Fraud Claims team at TLW Solicitors, says:

“What we now know is that scammers are targeting vulnerable people. The elderly, people who have been recently bereaved, or anyone who is distracted by life’s big events can fall victim to fraud. We have seen romance scammers target people who are lonely and cryptocurrency scammers target those in financial difficulty. We urge everyone to learn how to spot the red flags, so they can avoid being scammed. And also, to speak up if they are the victim of APP fraud.

As well as protecting ourselves, we should be particularly vigilant on behalf of anyone we know that may be vulnerable, including the elderly, those with medical conditions, the bereaved or financially naïve, such as young adults.

Not all may be lost, these challenges needn’t be faced alone – so please don’t feel ashamed or embarrassed – get advice.”