Customer was asked to transfer money as her account was under threat

Banking Fraud and scams

Nadia contacted us after the bank refused to refund £100,000 of her money she was persuaded to send to a fraudster by a sophisticated social-engineering scam.

What happened

Nadia said she received a call that she thought was from the police. She was told staff at her local branch had been stealing money from customers and her account was under threat. The call was actually from a fraudster. They convinced her that she needed to move all of her money to a ‘safe account’ in order to protect herself from fraud.

Following the instructions she was given, Nadia made four transfers in branch for £25,000 each over the course of four days. She transferred the money to an account abroad using the account information the fraudsters had provided to her – thinking this was a ‘safe account’ in her name. She was told to tell the branch staff, if asked, that the money was being used to pay for a wedding.

She then waited for details of her new “safe account” to arrive in the post in line with what the fraudster had told her. When this didn’t happen she became suspicious and called the police who told her there was no investigation and she should call the bank immediately.

The bank confirmed she had been the victim of a scam but it said that it wouldn’t refund the money because she had authorised the payments herself.

What we said

We asked Nadia and the bank what conversations had taken place when Nadia went into branch to make the transfers.

The bank told us that Nadia was well known in branch by staff who recognised that the transactions were unusual and out of character for her. But it said because she answered all of the questions from its script on scams, including one which asked “are you making these transactions on the instructions of someone else?", and she was able to explain what the money was for, it followed her instructions. So it didn’t need to refund the money to her.

Nadia remembered being asked some questions. But she said because she was told to go in with a cover story, and she was extremely nervous and anxious about the whole situation and what was happening to her savings, she didn’t really take in what was being said to her. She said she just wanted to make the transactions quickly and get out of the branch.

Scams like this are becoming increasingly common, so banks need to be on the lookout for them and they also know that they can’t necessarily rely on the answers given to them by their customers because it’s possible that the customer may – like Nadia - be under the control of a fraudster.

There is an arrangement between banks and the police called the Banking Protocol which means that when a bank is concerned or suspicious about an out of character transaction it can contact the police who will speak to the customer.

We looked carefully at Nadia’s previous account activity and her circumstances at the time. We felt that whilst the bank had asked some questions, Nadia’s behaviour and the nature of the transactions was so out of character, that we thought it ought to have asked more questions and followed the guidance set out in the banking protocol.

In Nadia’s case we felt that the bank had enough information that it ought to have been concerned Nadia could be the victim of a scam notwithstanding the answers she had given. And we said if it had asked more questions or called the police we thought the scam would’ve been prevented.

So we told the bank to put things right by reimbursing her the £100,000, plus 8% per year simple interest, and a payment for the distress and inconvenience she had suffered as a result of the bank's actions.