Scam Afternmath
Discussion
Herdwick said:
What I was trying to convey partly, was that its all too easy to blame the victim for being careless.
Secondly, the banks would take no responsibility for the opening of a fraudulent account.
In our case, the companies that were contacted to offer goods to were all carefully targeted (from what I could establish) that they were the type of place that had previously bought 'surplus' goods, so in many cases, the email offering the initial contact was not something that struck as suspicious.
The scammers must have spent a lot of time on research to find their victims, and having seen copies of the emails between prospective buyers and the scammers, they were extremely plausible.
Their biggest mistake was to pick/use a company that was so small, that it could never have been involved in that type of business. Had they cloned an existing ''Plant/skip'' type of company, they would have got much further sadly.
Completely unrelated, but as you are named after the most stupid sheep known to humankind, and come from Cumbria, are you farming?Secondly, the banks would take no responsibility for the opening of a fraudulent account.
In our case, the companies that were contacted to offer goods to were all carefully targeted (from what I could establish) that they were the type of place that had previously bought 'surplus' goods, so in many cases, the email offering the initial contact was not something that struck as suspicious.
The scammers must have spent a lot of time on research to find their victims, and having seen copies of the emails between prospective buyers and the scammers, they were extremely plausible.
Their biggest mistake was to pick/use a company that was so small, that it could never have been involved in that type of business. Had they cloned an existing ''Plant/skip'' type of company, they would have got much further sadly.
LeoSayer said:
The criminal offences for Nat West aren't detailed but I assume they concern the bank not following procedures, not acting on suspicions, poor recording keeping and governance. Interesting that this case involves James Stunt - someone who has been mentioned on PH a number of times thanks to his cars.
One thing I note is that there is a new proposed offence of 'Failure to prevent' all aspects of economic crime eg. fraud. Details on link below.
https://www.lexology.com/library/detail.aspx?g=44e...
Would this have prevented the scam in question? Who knows?
Another thing to note is that 'Failure to prevent legislation for tax evasion has been in place since 2017.
Thanks for posting - just printed off the outcome of the consultation, and will have a look later this evening. What an exciting life I lead. One thing I note is that there is a new proposed offence of 'Failure to prevent' all aspects of economic crime eg. fraud. Details on link below.
https://www.lexology.com/library/detail.aspx?g=44e...
Would this have prevented the scam in question? Who knows?
Another thing to note is that 'Failure to prevent legislation for tax evasion has been in place since 2017.
NickCQ said:
This is the bit that always shocks me about these scams. At that same time as opening a bank account is a huge headache for legitimate businesses, scammers appear to have multiple "clean" accounts and move money between them with impunity.
It's an interesting observation. I'd think that there's a good bit of inside work going on complimented by the ease of registering with 'currency transfer services'. From the profile of 'our' scam the banks are mainly challenger banks. They have grand sounding names in some cases to make them seem simillar to older established institutions, but when you dig deeper you realise they are relative newcomers.
In my experience a large majority of fraud funds are cashed out via Barclays. They’re also one of the least industry friendly banks to deal with when it comes to fraud. Like getting blood from a stone when you want help and they’re involved.
The criminals will always be one step ahead though. They’ve already developed ways to sell an ID along with a Snapchat style matching face filter, to get past the more tech focussed fraud checks where you take a live video/photo as part of your identity checks.
The criminals will always be one step ahead though. They’ve already developed ways to sell an ID along with a Snapchat style matching face filter, to get past the more tech focussed fraud checks where you take a live video/photo as part of your identity checks.
Greshamst said:
In my experience a large majority of fraud funds are cashed out via Barclays. They’re also one of the least industry friendly banks to deal with when it comes to fraud. Like getting blood from a stone when you want help and they’re involved.
They've not changed much since they financed apartheid, then?I see the other side of this a lot, we run a haulage/self store yard and we buy and sell containers and run a crane truck.
We get at least one call a week asking us for a price to pick up 20ft containers that the person has "bought" from ebay/fb market place/gumtree and deliver them to their address.
A tiny bit of questioning usually brings out that the person has been scammed and that there never was any containers and they have lost a couple of grand because they paid via bank transfer and clicked OK for all the security questions.
Its such a shame, in pursuit of a bargain they they get ripped off.
Its replaced the jcb scam that was similar from a couple of years ago.
We get at least one call a week asking us for a price to pick up 20ft containers that the person has "bought" from ebay/fb market place/gumtree and deliver them to their address.
A tiny bit of questioning usually brings out that the person has been scammed and that there never was any containers and they have lost a couple of grand because they paid via bank transfer and clicked OK for all the security questions.
Its such a shame, in pursuit of a bargain they they get ripped off.
Its replaced the jcb scam that was similar from a couple of years ago.
Was the police banking protocol utilised at any point Bogsye?
https://www.which.co.uk/news/2020/09/bank-anti-fra...
https://www.which.co.uk/news/2020/09/bank-anti-fra...
ChrisNic said:
Was the police banking protocol utilised at any point Bogsye?
https://www.which.co.uk/news/2020/09/bank-anti-fra...
Thanks Chris - that’s an interesting read. I don’t believe so. Of 13 transactions only 3 caused the account to be locked and poor questions asked.https://www.which.co.uk/news/2020/09/bank-anti-fra...
The peak, unchallenged payment was for £95k.
ChrisNic said:
It might be worth encouraging the ombudsman to understand why it wasn’t used.
I’ll certainly put it in there, however it would only apply to the transactions between September 20 and end of November 20 when we discovered this. The main let down is the low rate of detecting unusual transactions ie tens of thousands of pounds and international as well as the very weak line of questioning when a transaction was flagged.
With the data I have I reckon I could develop a pretty good training course on how not to do it, and a series of questions for different scenarios that would yield results without the customer feeling it was intrusive.
That wont necessarily get any refund, but I’ve now gone as far as contacting my MP as I think it would be good to evidence the victim impact to an appropriate treasury committee or or regulatory body.
ChrisNic said:
It might be worth encouraging the ombudsman to understand why it wasn’t used.
I was also pointed to a change in the Banking Protocol 4years ago indicating that the bank couldn't be criticised for refusing to make a payment if they thought it was suspect. Correspondingly this tallys with the terms & conditions fo the account which state that 'We may refuse to make payment for you if we reasonably believe that the account you want to pay is operated as part of an authorised push payment fraud'.
Bogsye said:
NickCQ said:
This is the bit that always shocks me about these scams. At that same time as opening a bank account is a huge headache for legitimate businesses, scammers appear to have multiple "clean" accounts and move money between them with impunity.
It's an interesting observation. I'd think that there's a good bit of inside work going on complimented by the ease of registering with 'currency transfer services'. From the profile of 'our' scam the banks are mainly challenger banks. They have grand sounding names in some cases to make them seem simillar to older established institutions, but when you dig deeper you realise they are relative newcomers.
Bogsye said:
anonymous said:
[redacted]
Weapon of choice - Currency Transfer agents like Revolut etc.. Data sharing. How do scammers get data?
Despite all the new data protection stuff, which ultimately just limits normal people and business more, is utterly transparent to criminals.
Phone spoofing. I no longer pick up the phone to anyone unless their number is already added. Only the NHS are a giveaway with number withheld.
It’s the Wild West.
How can this not just be properly traced? Whoever does the forwarding of the spoofed number must have the real number and line/imei etc? If they get pinged with scam calls block them.
Banks. I have to jump through hoops to get an account.
If it’s so easy to scam via a bank account then they need to audit all accounts without verified ID, addresses and so on, and block them until details are provided.
No one should be able to send money to a uk or ‘western economy’ account and it be untraceable.
It just seems government can’t be arsed to legislate better.
The rush for fintech and digital banking is crazy too. It’s convenient yeah, until one bit is breached and then all your money is exposed.
Keep finances face to face in banks, pay them for their time, and 95% of this probably goes away.
anonymous said:
[redacted]
Agreed.Why do banks facilitate bank accounts for criminals?
Why do 'legitimate' banks work with banks that facilitate and operate bank accounts for criminals?
If we're going to say that these frauds are very sophisticated and are very difficult for banks to combat, then we should most definitely forget any idea that members of the public will fare any better.
NickCQ said:
Bogsye said:
The scammers need to be starved of oxygen, and so the starting point is the ellaborate network of bank accounts that they open to then starburst the money back through. What is apparent is that new fintech based challenger banks allow ease of access to create accounts to drive money around the system.
This is the bit that always shocks me about these scams. At that same time as opening a bank account is a huge headache for legitimate businesses, scammers appear to have multiple "clean" accounts and move money between them with impunity.We analyse the data deeply, and conduct checks on payments that flag, inbound or outbound. Of the inbound second generation fraud we see, Monzo accounts for high proportion. Then it's Revolut, Starling and Lloyds.
We sometimes see the same newly incorporated company have 4 or more accounts at PPS, due to whitelabelling for firms who are chasing "growth" (in terms of user numbers). At each account they will go through the entire monthly allowance (usually 250k). Surely PPS is seeing that information so how does it get comfortable with a newly formed business clearing 1m+ a month? Ultimately the buck stops with PPS, not the whitelabel firm.
That said, the scammers often take a very powerful hold of the victim. We had a case where we held up a payment for a check. Our system uses machine learning and this one caught the system's eye. We analysed the information and it was a 67 year old woman. What she was purporting to buy did not suit her profile. I should add that we held no concerns over our customer, just concerned this lady was buying something she knew nothing about and that what she was buying was easy to move elsewhere and convert back to cash (and difficult to trace).
So we called her bank (HSBC). After being messed about for two hours, they said they would call her and we were adamant we would stay on the call. They got off the call to us and said for us not to hold the payment and not to return it. We stated what she was buying and that we were worried she was at risk. They said they're satisfied to process it because she is adamant.
My TM team were not satisfied so they further analysed the data we were provided and noticed there was a lawyer's letter in the SoF documentation, the contents of which hinted she may be vulnerable. After confirmation they could contact the firm to satisfy for SoF/SoW check they mentioned to the lawyer what she was buying and the lawyer immediately said to hold tight for ten minutes whilst he calls his client. He called back saying "regrettably process" the payment.
Short while later, the lady in question calls and starts swearing at my team, and filed a complaint with my compliance manager saying we had no right to hold the payment up. That she knew what she was doing and that she knew what she was buying. She then went on to pay another 200k to buy more. Several times payments were stopped and checked again as it flagged again in our TM, with the obvious friction that causes.
Fast forward 9 months, turns out it was a romance scam and she wants her money back and made a complaint against HSBC. Who do you blame in that scenario?
The banks have to act on your behalf and execute a payment order unless there is a real risk it is fraudulent or ML. We also have to release the funds to you if we have no valid reason to hold it (and generally before close of business). Unless we go on a SAR filing frenzy, we're open to a complaint or a compensation claim.
From our side as a counterparty, some of the banks seem really bad with their TM stuff. I mean really bad. And most of the fintech's are too. But unless there's a combination of customer awareness and bank safety nets, this will continue. As things get more digital, it will get even worse. During the lockdown, we have seen a large rise in scams.
All my TM and compliance staff are tasked with liaising with banks daily as we might see things that flag up. Natwest never reply to concern emails. HSBC used to treat us like pests, but they engage very closely now as they see the value in what we are doing. The same is also true of Barclays, who have had a 180 degree change in attitude towards it.
And to answer why the scammers cannot be traced, what happens most often is the account is in the name of a mule. That mule thinks they are getting 10% of a business transaction (or they know they are in on a scam but hey) and then when they are caught they are unable to provide any details of the person they were working with (either they really don't know, or they're too scared to say).
The money often leaves via international payments (bounces around several accounts and then gets withdrawn) or it goes via cryptocurrency. Transferwise used to open accounts with just emailed in passport and proof of address, and gave access to the account right away, before the card arrived at the address. By the time the unwitting mule had worked out why they had a transferwise account arrive in the post, the scam had taken place. They don't remember opening an account at Transferwise, but it might not clock that the council emailing them to ask their for id and address proof wasn't really the council.
One thing that everyone must be mindful of is whilst these scams are awful, the more intervention you expect from the banks, the more everyone's transactions will be questioned and delayed. And then the scammers will find another way. This is inevitable. What needs to happen is scammers brought to justice properly. At the moment they operate with impunity. If you're caught being a mule, you should be punished. Nothing really happens to the mule beyond difficulty getting an account.
Case in point is where we caught a generational fraud (mule account at Monzo) and returned the funds to Monzo to return to the victim. Our system automatically blacklists the account and remitter name. Guess what, two months later she sends money in from a "fintech" account and our system holds it up. Yep, generational fraud again. Obviously the registration with CIFAS isn't deterring them!
Some advice to anyone who has someone vulnerable (it often is older folk, but not exclusive to them):
You can ask the bank to be added the CIFAS watchlist. This can help banks and other FI with an early warning sign.
If an "investment firm" calls you, do not engage. If you are looking for an investment, do your own searches and perform due diligence. Remember there is no such thing as a free lunch.
There is a lot of social engineering involved. Never just hand over your identity or proof of address documents to anyone who asks for it. Verify that they have a legitimate reason to ask for it, and if they found you, rather than you finding them, then be very weary. Never perform any selfie type check or text as that can be photoshopped too. Those documents can be used to open accounts or take loans in your name. You could end up being the mule. If for example an ebay trader says they need your KYC docs, do not hand it to them.
Pay close attention to the confirmation of payee check the bank performs. If you think you're paying British Telecom and your bank says the name of the account you provided is ABC Ltd then don't proceed.
Before you make any payment, if it is to a new beneficiary and for an investment or to pay for anything, do not be rushed into making it. Being pushed is a tell tale sign of a scammer. Stop and take a breath.
Be weary of trustpilot reviews and cloned websites. Look carefully at the email address domain name. is it @ajbell.co.uk or is it @ajbell.cc? Search for the company independently and contact them directly.
If you're being asked to pay a deposit, use a credit card (not even a debit card, although that's better than bank transfer).
Install and keep up to date good internet security software on your computer. Antivirus is not good enough. Don't give anyone remote access to your computer.
Finally, tell your bank exactly what the payment is for if you harbour any concern. Push the liability to them and ask them if they are able to give you any help or reassurance the transaction is genuine.
If you have any doubt whatsoever do not make the payment. This is where your subconscious is making an assessment and it isn't happy! Heed its advice.
To the OP if you need any advice on FOS process drop me a message and I'll be happy to help with any questions you may have.
I think FWIW, from the transaction activity you describe, your elderly relatives have a very good chance the FOS will side with you. We have had to give evidence a few times to FOS for claims against banks and we have seen a good number of cases sided with the consumer.
Very helpful post from ninja_eli!
But I’m just going to leave some explanations here as it’s a bit of a bugbear when people use industry jargon that not everyone is going to understand...
Generational fraud - how fraud funds are moved around the banking system. The first account that receives money from a scam victim is ‘first generation’. It’s usually then quickly moved to another institution which would be ‘second generation’. I.e Scam victim @ barclays > revolut (1st gen) > Lloyds bank (2nd gen) > transferwise to Dubai
TM - transaction monitoring
SoF - source of funds
SoW - source of wealth
Also to those saying ‘how hard can it be to stop fraudsters opening accounts’, when the fintechs brought on video onboarding (where you hold a copy of your id in a video and say ‘hello I am greshamst and I want to open an account’ this was seen as a great way to reduce false identity fraud. One fraudster cannot sit there and create 20 accounts as they would be discovered in 20 videos.
However fraudsters are now selling fake/blended identity documents on the dark web along with a face filter for the ID, like you get face filters on Snapchat.
So the fraudster would use a programme on their phone to give themselves a new appearance via a face filter when signing up.
The intelligence of the fraudsters on the ‘bad’ side tends to be higher than on the ‘good’ side, because the rewards of successful fraud are so high.
But I’m just going to leave some explanations here as it’s a bit of a bugbear when people use industry jargon that not everyone is going to understand...
Generational fraud - how fraud funds are moved around the banking system. The first account that receives money from a scam victim is ‘first generation’. It’s usually then quickly moved to another institution which would be ‘second generation’. I.e Scam victim @ barclays > revolut (1st gen) > Lloyds bank (2nd gen) > transferwise to Dubai
TM - transaction monitoring
SoF - source of funds
SoW - source of wealth
Also to those saying ‘how hard can it be to stop fraudsters opening accounts’, when the fintechs brought on video onboarding (where you hold a copy of your id in a video and say ‘hello I am greshamst and I want to open an account’ this was seen as a great way to reduce false identity fraud. One fraudster cannot sit there and create 20 accounts as they would be discovered in 20 videos.
However fraudsters are now selling fake/blended identity documents on the dark web along with a face filter for the ID, like you get face filters on Snapchat.
So the fraudster would use a programme on their phone to give themselves a new appearance via a face filter when signing up.
The intelligence of the fraudsters on the ‘bad’ side tends to be higher than on the ‘good’ side, because the rewards of successful fraud are so high.
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