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Banking scams: what to do if the banks blame you

Posted on 31st October 2018

The number of consumers hit by banking scams is at an all-time high, yet with banks tightening their policies on compensating victims, where do you stand?

Banks differentiate between a ‘fraud’ and a ‘scam’, often refunding customers on the former, but refusing to on the latter. That’s because fraud is viewed by the banks as being the fault of criminals, whereas scams involve customers unwittingly transferring funds, so the banks lay the blame at the customers’ door.

However, the Financial Ombudsman recently said that that as criminals’ methods become more complex it is going to be harder for the banks to justify when a customer has been negligent in making payments to fraudsters.

This may come too late though for those who are on the receiving end of the bank’s hard-ball approach to scams. We have seen a number of people who have been contacted by a third-party purporting to be various service providers. They have been duped into logging on to an online banking platform. Believing the call to be genuine, they complied by using links to access online accounts.

Unfortunately for these people, this is a particularly sophisticated kind of fraud, which allows the criminals to also take control of computers and recreate a bank’s website. Once the unsuspecting person has logged in, the criminals are able to help themselves to tens of thousands of pounds. In one particular case, the bank is refusing to issue compensation arguing that the person was scammed and didn’t do enough to protect himself.

Five tips what to do if you find yourself the victim of a scam

  1. Report the matter to your bank immediately giving as much detail as possible about anyone who contacted you, the sums involved, and the details of any account you may have been asked to transfer funds to.
  2. At the same time, contact the police and make sure you are given a crime reference number.
  3. If the bank refuse to assist write a complaint letter to them outlining exactly what has happened. If the banks claim you have been “grossly negligent” they may refuse to compensate you. However, this exclusion is getting harder for the banks to rely upon.
  4. If the bank continues to refuse to help you, report the matter to the Banking Ombudsman. You can do this when you have received a “final decision” from the bank. The ombudsman will investigate for you.
  5. Another option is to consult a solicitor on your behalf to write to the bank and try to claim the monies back via the courts.

The best way to protect yourself and your money is to be hyper-vigilant. It’s far easier to avoid being a victim of fraud than it is to try and recover stolen monies. I’d advise every customer to find out what their banks communication policies are and adhere to their fraud protection advice.

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