A crime inflicting misery on thousands of people every year and one that we need to do much more to eradicate and fight against. It is undermining the integrity of the financial services industry, especially the banking sector.
This crime is the one recurring theme in my mailbag at The Mail on Sunday, and as things stand – codes or no codes – the odds are very much stacked against victims.
Unless you are very lucky, there is little you can do as a targeted customer but suck your thumb and suffer the losses. It does not just affect the elderly, but the young, the financially sophisticated and the successful. Businesses, students and long-standing customers.
I am currently receiving at least two dozen emails a week from readers stating they have been recent victims of financial crime.Earlier this month, I was contacted by a woman whose step-mother had been a victim of so called ‘financial grooming’ – encouraged by someone (maybe a carer, a relative or someone they trust) to make a large cash withdrawal on their behalf. Although I am battle hardened, it is one of the worst financial crimes I have reported on for a while.
The step-mother, aged 89, suffers from Alzheimer’s disease and has home care assistance. In August, she was befriended by ‘builders’ (I use that term loosely) who proceeded to do little by way of work. Preying on her illness, these vile groomers drove the vulnerable lady to the local Barclays branch so she could withdraw money for them – not just once, but on three separate occasions.
First £300, by ATM. Then, presumably because it was so easy, they got her to go into the branch and withdraw another £7,000.
Although the bank staff were suspicious and followed her out of the branch and saw her get into the van – and noted down the number on the (stolen) registration number plate – the crime had been committed. The greedy groomers brought her back a third time but this time the bank did what they should have done second time around and alerted the police.
By the time they arrived, the criminals had long hit the accelerator pedal and raced off to the hills, never to be seen again.
Despicable as the crime was (God help anyone who did something similar to my mother), it is the bank’s response to this whole episode that sticks in the craw. Since August, it refused repeatedly to accept any blame for the lack of care it afforded this vulnerable lady.
This is despite the fact that a) the woman had no history of making large cash withdrawals; b) the £7,000 withdrawal meant she had less than £450 left in her account; and worst of all c) the step-daughter was named as attorney on the bank account but was not told about the £7,000 withdrawal until after the money had left her mother’s account.
The step-daughter was stoic throughout, literally rattling her knuckles on every Barclays’ department door in a quest to get the bank to see sense. After receiving a pro forma letter from the bank saying her complaint had been ‘resolved and closed’, she decided to speak to the press. Within 48 hours, the bank had returned the stepmother’s money and admitted it had failed to meet the "high standards that our customers can expect from us".
A victory, but at best a pyrrhic one because most victims of financial crime are left to hang out to dry.
I am currently receiving at least two dozen emails a week from readers stating they have been recent victims of financial crime. Nobody, absolutely nobody, is coming to their rescue.
Unlike the step-mother who was tricked by financial groomers, most of these victims are being ‘spoofed’ by sophisticated criminals into handing over their bank balances.
It starts with a phone call, allegedly from a bank’s fraud department, stating that there is unusual activity on the customer’s account and that they have had to suspend it. The telephone number (do not ask me to explain how this is done) is identical to the helpline number on the customer’s debit card, tricking the customer into thinking the call is ‘genuine’.
The customer goes online, sees their account is indeed suspended and that there are a series of new standing orders and pending payments. They are then told they must move what money is in their account into a new ‘secure’ account. Once this happens, the fraud is complete and nine times out of 10 the money has disappeared for good.
By the time the receiving bank is contacted, the money has flown the nest.
Although a new ‘voluntary’ code being worked on by consumer groups and bankers may help stem the onslaught of this banking crime, I remain unconvinced.
At the end of September, Katy Worobec, managing director, economic crime at banking trade association UK Finance, said some mighty fine words on the evil of banking fraud and scams. She said that the criminals behind it "target their victims indiscriminately and the proceeds go on to fund terrorism, people smuggling and drug trafficking, whether or not the individual is refunded".
Tellingly, she added: "Every part of society must help to stamp out this menace, especially by stopping the data breaches, which increasingly are fuelling fraud." Absolutely.
Our faith in a secure and fair banking system is being tested to the limit.
Jeff Prestridge is personal finance editor of the Mail on Sunday
