Scottish Widows has agreed to return funds feared lost after an adviser's tireless battle with the provider.
Financial Adviser Gary Friel, who runs Kent Insurance Services in Gillingham, said he and his client were the victims of a "man in the middle" fraud, whereby Mr Friel’s email account was hacked, and an email sent from there to Scottish Widows requesting to withdraw £35,000 on behalf of a client.
When he discovered the fraud in September, he contacted Scottish Widows and also Barclays, the bank into which the funds were paid, to alert them of the fraud and initiate a recovery of the funds.
He said Barclays had outlined a process called an Indemnity Retrieval Request, to help Scottish Widows retrieve the money from the Barclays account if it were still held in the account, which it was.
But the adviser said Scottish Widows had refused to help him and his client and only began to intervene at his continuous behest.
Mr Friel received three letters from Scottish Widows, two of which have been seen by Financial Adviser, stating that the provider rejected his complaint, but subsequent to our speaking with Scottish Widows, it said it would retrieve the funds on behalf of the client.
The provider stated it had undertaken its usual safety checks, including matching signatures on documents, and as a result would not take the matter further.
Financial Adviser first contacted Scottish Widows on November 22 to seek comment. Mr Friel had not had any further communication from the provider to indicate that it would help by that time. But after several more requests for comment on Mr Friel’s case, he received word on November 30 that the money was being returned to the account of his client.
Despite repeated attempts by Financial Adviser, Scottish Widows did not provide an official comment on why it had initially declined to help.
A representative of the company said: "We strongly urge financial advisers to be vigilant of fraudulent activity. As a gesture of goodwill we are arranging for the funds and associated costs, including market movements, to be credited to [the client's] account."
Mr Friel said: "Personally I’m livid with Scottish Widows as they have failed to do everything possible to retrieve the money. Had I not persevered and come to Financial Adviser the money would simply have languished in a Barclays account ad infinitum.
"The handler who let me know the good news even tried to defend Scottish Widows but I reminded him that they had washed their hands of it very early on and said that a court order was required. I dug deeper with Barclays and learned of the Indemnity Retrieval process, which Scottish Widows repeatedly said that they knew nothing about.
"The client will be put back in the position that she would have been before the fraudulent withdrawal."
Minesh Patel, an adviser at EA Financial Solutions, said: "It is a concern given cyber crime is on the increase.
"I am pleased that some of the providers we deal with telephone the client before sending the proceeds of a sale thus preventing some attempts at fraud."
david.thorpe@ft.com
