Woman scammed out of £45,000 by fraudster

After four attempts were made to do this, some £45,000 had been transferred to the fraudster. The bank managed to recover £17,000 but refused to reimburse the lost money, offering instead £300 for inconvenience and stress.

The woman and her husband complained to the Channel Islands Financial Ombudsman, which ruled that the bank should compensate the couple and make good their losses.

Compensation of £30,000 was paid.

The incident is one of many highlighted in the Cifo annual report.

‘Phishing over the phone is a big thing at the moment, but sadly this isn’t even the biggest case we’ve seen,’ said principal ombudsman Douglas Melville.

‘We’ve had extreme cases where individuals have lost over a million pounds by investing in fraudulent companies.’

The customer received a ‘vishing’ phone call from a fraudster in January last year, who told her their money was in jeopardy from criminals who had accessed the couple’s joint accounts.

She was told to make various payments through the day to move and safeguard her money, and was also told not to contact anyone or to use her mobile during the interaction, which lasted most of the day. The woman was said to be in a state of shock and fear as she contacted her bank to make a first payment of £20,000. The bank intercepted it and told the woman that they believed it was fraudulent, but the fraudster told the woman to say it was genuine. The bank went ahead with the payment.

Cifo said the fraudster continued to ‘terrorise’ the woman on the phone, saying criminals were still in the joint accounts, and instructed her to make another £25,000 online payment to a different UK account. That transfer went through. Later that afternoon the woman was instructed to make two more payments, both of £25,000, but both were intercepted and stopped by the bank.

When her husband was alerted later that day, he tried to contact the bank but could not get a response. When he finally got through he was assured that the first payment was still being held for fraud checks, but this had gone through, as had the second payment.

The bank recovered about £17,000 of the £45,000 paid, leaving the couple with a loss of £28,000. They complained, but the bank said it would not reimburse, though it had accepted that the husband had been given incorrect information and so offered a compensation payment of £300.

The couple took their case to Cifo. The ombudsman investigated and noted that the first transaction had been stopped because the bank account being paid was on a UK banks’ watch list, and the local bank had access to this list.

Cifo officers also heard, from the bank’s recording of the first transaction call, that the fraudster’s voice could be heard at the very end, instructing the woman to hang up. It said the bank should have noted that and realised that the woman could have been acting under duress. The content of the call and the answers she gave to questions were another red flag.

Having intercepted the first payment because of concerns about the recipient, the bank could have done much more to stop further payments, including contacting the woman’s husband, said Cifo.

It upheld the complaint, ordered the bank to compensate the couple for the lost funds, plus interest at an annual rate of 8%, and a distress and inconvenience award of £500, the final sum totalling about £30,000.

The Cifo report does not state where the complainant or the bank were based, but the bank must be an operation within the islands to fall into its scope.