Help! Father badly scammed

Benbythesea

My father has just been scammed and any advice or observations would be gratefully received. He is a pensioner in his late 70s.

Last month my father was contacted by someone claiming to be from his bank. The caller said that my father’s account had been compromised and they believed that it was an “inside job”. For that reason the caller said that an investigator from the FCA would make contact. My father was duly called back by and after several conversation over a number of weeks my father was effectively “groomed” by the fraudsters. He believed that the FCA were about to make some high profile arrests and my father was integral to bringing them down.

The upshot was that my father contacted his financial advisor and asked that all his investments and pensions (in excess of £650 K) should be immediately liquidated and the money sent to his current account. The financial advisor checked my father was sure and my father signed a letter of consent and the funds were duly liquidated.

My father doesn’t do internet banking and so he went into his local branch and requested that an internal payment be made to an account (the details of which were supplied by the fraudsters). He just had his debit card as id and they did this. I think he may have had a call from the bank after the first payment to check this was ok. As more funds were liquidated by his financial advisor he went in again on two further occasions and requested two further payments which weren’t queried.

When my father heard nothing more the penny finally dropped. It is with the police and Action Fraud have been informed. Barclays are aware and investigating but so far we have heard nothing.

The final nail in the coffin is that my father could find himself subject to capital gains tax and owe HMRC £70k - £80K for liquidating his assets. It really is a very sorry tale.

The above fraud seems so far fetched and my father is the last person you would expect to fall for something like this. As you can imagine he is embarrassed, depressed and about as low as I’ve ever known him. His wife isn't well and the financial implications of this are devastating.

Does anyone think the bank should have done more? What about the financial advisor? Does he owe a duty of care to ensure that my father really knew what he was doing (especially by turning himself into a high rate tax payer)?

Thanks for reading and all advice most welcome.

eskbanker

Benbythesea wrote: »

The financial advisor checked my father was sure and my father signed a letter of consent

[...]

I think he may have had a call from the bank after the first payment to check this was ok.

Ouch - that all sounds horrendous and I hope that at least some recovery of funds is possible, but from the above quotes it does sound like both bank and financial advisor made some sort of checks that he knew what he was doing. Do you know exactly what he told them, in terms of any explanation he gave for his actions?

What is the relationship with the financial advisor, i.e. is he engaged to provide specific advice in specific scenarios (e.g. when investing) versus a broader financial management remit that could encompass, for example, tax planning?

Benbythesea

Thanks for reply -

Do you know exactly what he told them, in terms of any explanation he gave for his actions?

Neither the bank nor the financial advisor asked for an explanation so none was given.

What is the relationship with the financial advisor

The financial advisor was there to give advice on pension and pension planning so quite a broad remit. My father would meet with him on an annual basis to discuss changes in legislation etc and investments would be adjusted accordingly. I imagine that tax planning would be a feature of this type of service.

Butch_Dingle

Benbythesea wrote: »

My father doesn’t do internet banking and so he went into his local branch and requested that an internal payment be made to an account (the details of which were supplied by the fraudsters).
.

First of all sorry to hear about this, i cannot imagine what your father must be going through.
Now I know its easy to be wise after the event but didn't the alarm bells start ringing when your father was given bank details to send the funds into? And what was the reason given for the bank transfers by the fraudsters?

Benbythesea

Now I know its easy to be wise after the event but didn't the alarm bells start ringing when your father was given bank details to send the funds into? And what was the reason given for the bank transfers by the fraudsters?

Thanks for your reply. I know alarm bells should have started but they had manipulated him to such an extent that he was absolutely convinced he was talking to the FCA and he was sure that he was helping with a large investigation that was leading to high profile arrests. I'm not completely clear what the reason given for the payments were (I'm seeing him shortly to go through all this) but clearly alarm bells should have been deafening. I know that he was supplied with fake cheques to cover the payments and the police now have these. It is extraordinary.

tacpot12

You would have hoped that someone at the IFA would have asked your father why he wanted to liquidate his pensions, given the number of pension scams and the publicity surrounding them. Your IFA should have warned your father about the tax charge that he will now be liable for. I think he should complain to them and see what they say about why they did not ask him who was driving him to liquidate his assets.

I do understand why your father might not have asked the bank branch staff, because he had been sold on the story that it was an "inside job", but he could have visited any branch other than his own and asked for confirmation of the situation and process. So your father really has been incredibly stupid in not discussing it with anyone in person. Given the amounts involved, I would have expected a visit from the police at the very least. It is so obvious and common a scam ("just transfer your money to these account details") that he really has not got a hope in hell of convincing anyone that he did not intentionally send this money to the people that now have it.

Chino

tacpot12 wrote: »

You would have hoped that someone at the IFA would have asked your father why he wanted to liquidate his pensions, given the number of pension scams and the publicity surrounding them.

Why? Unless a client specifically wants to discuss his or her reasons for cashing-in a pension fund, it's none of the IFA's business.

Ken68

The IFA would be top of my suspect list.

xylophone

How absolutely dreadful.

I am astonished that any responsible IFA can have followed your father's instruction without question or discussion.

I am also very surprised that the teller at the bank didn't check normal activity on his account and question these unusual payments.

eskbanker

xylophone wrote: »

I am also very surprised that the teller at the bank didn't check normal activity on his account and question these unusual payments.

While large six-figure transfers out would no doubt have been abnormal, to a certain extent this would be mitigated by equally unusual (but perhaps even larger) transfers in from one or more investment firms immediately beforehand - I suspect that the outbound transfers may have aroused more suspicion were that not the case, but using a current account to route money from one place to another is probably less conspicuous.

Perhaps worth mentioning in passing that the forthcoming Confirmation of Payee initiative will reduce (or maybe even eradicate) APP frauds like this once introduced next year, but obviously that's no consolation to OP and father....

tacpot12

I agree that it is very sad, but I don't think the OP can do much more that support and comfort his father and mother.