THE BLOG

The Next Banking Scandal Is Already With Us

07/07/2015 11:42 BST | Updated 06/07/2016 10:59 BST

You would think that by now the banks would be more careful in their daily operations. Yet even as I write this they are complicit in helping customers lose millions of pounds to fraudsters and are standing by idly and refusing to act.

It starts quite simply at first; a fraudster approaches either an individual or business and starts a dialogue with them. This happens millions of times every day and in most cases the interaction is perfectly normal. Recently however there is a worrying trend towards more and more people being conned by these individuals into handing over large sums of money.

The first and possibly most common type of fraud is the distant lover. Lonely people sitting in front of a computer screen, possibly on dating sites or forums, meet someone who seems to understand them.

Photographs are exchanged along with more and more personal details at which point the fraudster comes up with a reason to ask for a small favour; they need some cash. It could be for a sick relative, a flight to the UK to see you, a small loan to tide them over whilst they finish their degree; the list of excuses is endless.

Far too many individuals are taken in by the sob story and agree to send cash, and this is where the banks are culpable.

The conman (for most of them are male) asks for a direct bank transfer and sends you the details of the account into which you should pay the money. The account number and sort code are real but crucially they change the name of the account holder. So if the account is in the name of A.Conman the name they send you is the one which you know them by online, John Smith, Edward Jones or anything that they like really.

There used to be a rule whereby if any of the details on a transfer were incorrect then it would be stopped but it seems that the banks have relaxed or abandoned this rule, meaning that the payment goes through. And of course the money is withdrawn at the other end, the email account and profile are deleted and the bank account closed. Your money has gone forever and there is no trace of whoever did it.

Even more worrying are the businesses that are also falling prey to this type of fraud.

You may think that it should be harder to con money out of a business but in many case it is easier. We handled a case recently where the fraudsters posed as Land Transfer agents and had been approaching customers over email. They posed as a hugely reputable UK based firm of Land Agents but crucially they used a slightly different email address, a variant on the domain name.

Having establish that they could help people buy the land they wanted they ask for the money to be sent to them to be held in escrow before the land is transferred and once again they supply the bank details but changing the name of the account to the name of the reputable company. As a business you therefore believe that you are dealing with, and paying, the UK based company.

Of course as soon as the money is in the fraudsters account it is withdrawn, never to be seen again.

We have, on behalf of a number of clients recently, been talking directly with the banks and in particular their fraud teams. Worryingly they seem aware of these types of frauds but are not prepared to do anything about it.

So whilst the number of people bitten by this type of fraud increases on a daily basis and the sums being lost escalating to eye watering proportions the banks are refusing to do anything to protect customers.

Frankly the banks behaviour is bewildering at best and some would argue bordering on criminal at worst. How can they stand by and do nothing when this type of fraud is growing daily?

If you've been asked to send money to anyone overseas that you have never met or have been hit by this type of fraud then talk to a Private Investigator. Some of these fraudsters are not as clever as they think and there are clues to their real identity in their digital fingerprint if you act quickly.

Meanwhile we need to be asking some hard questions of the British banks, not least of which is why, after all the scandals they have endured over the past ten years, they are letting this one develop unchallenged?

Anthony Smith is an Investigator with Insight Investigations

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