How do fraudsters get away with it?

masonic

RG2015 said:

In answer to the OP's question, it does appear that ID checking and attempts at KYC are not working very well. Either the legislation is ineffective or the banks' implementation of these measures is ineffective.

ID checking and KYC usually happens at the beginning of a bank's relationship with a customer, so would be ineffective if the fraudster gains control of an account at any point thereafter. Though the implementation is far from perfect: very few banks insist their new customers participate in a video call or face to face meeting with their photo ID, and many customers would be put off by such a requirement. To make it really effective would probably require the use of biometrics recorded in a national database, but I can picture the outcry if such a thing was a requirement to open a bank account.

RG2015

masonic said:

RG2015 said:

In answer to the OP's question, it does appear that ID checking and attempts at KYC are not working very well. Either the legislation is ineffective or the banks' implementation of these measures is ineffective.

ID checking and KYC usually happens at the beginning of a bank's relationship with a customer, so would be ineffective if the fraudster gains control of an account at any point thereafter. Though the implementation is far from perfect: very few banks insist their new customers participate in a video call or face to face meeting with their photo ID, and many customers would be put off by such a requirement. To make it really effective would probably require the use of biometrics recorded in a national database, but I can picture the outcry if such a thing was a requirement to open a bank account.

When the money is being transferred out of the victim's account it will ultimately end up in the fraudster's account. The fraudster's bank must have a full record of this.

Is it just the case that fraudster's are clever enough to con the bank into accepting whatever ID credentials they submit?

masonic

RG2015 said:

masonic said:

RG2015 said:

In answer to the OP's question, it does appear that ID checking and attempts at KYC are not working very well. Either the legislation is ineffective or the banks' implementation of these measures is ineffective.

ID checking and KYC usually happens at the beginning of a bank's relationship with a customer, so would be ineffective if the fraudster gains control of an account at any point thereafter. Though the implementation is far from perfect: very few banks insist their new customers participate in a video call or face to face meeting with their photo ID, and many customers would be put off by such a requirement. To make it really effective would probably require the use of biometrics recorded in a national database, but I can picture the outcry if such a thing was a requirement to open a bank account.

When the money is being transferred out of the victim's account it will ultimately end up in the fraudster's account. The fraudster's bank must have a full record of this.

Is it just the case that fraudster's are clever enough to con the bank into accepting whatever ID credentials they submit?

You can't assume it will ever end up in an account in the name of the fraudster, or even an account the fraudster has opened. If it does end up in an account owned by the fraudster, it will probably not be a UK account, or it could be an account the fraudster merely controls, having gained control of from someone else who opened it legitimately. Aside from foreign bank accounts, there are all sorts of e-money services, and related things like cryptocurrency, that could be used to help move the money out of reach. The first hop is likely to be into an account that the fraudster controls either directly or indirectly though someone else. It may pass through and be distributed among several such accounts, and if the fraudster is using money mules, then the stolen funds may reach them as banknotes.

barnstar2077

I would really like to have the option of increased security on bank accounts.  Let me set in advance how much can be transferred without first needing to speak to someone at the bank to verify my details etc.  Then have the bank say "Mr Smith, you have set your account to our highest security level and you have informed us that you are vulnerable.  Are you sure you would still like to transfer twenty thousand to a cold caller to buy a carpark space in Portugal?".  The option to notify a nominated person should a request be made would also be helpful.  Banks could do a lot more to help the situation in my opinion. 

Make it all opt in so as not to annoy people of course, but I for one would sign up on day one.  Even gambling sites let you set monthly limits etc. 

masonic

barnstar2077 said:

I would really like to have the option of increased security on bank accounts.  Let me set in advance how much can be transferred without first needing to speak to someone at the bank to verify my details etc.

Yes, being able to set limits on what can be done without jumping through some extra hoops would be valuable. It seems like banks are only just introducing the ability to lock a debit card, so have some catching up to do. It would be nice to be able to opt into more secure 2FA too, SMS codes are ok for low risk things like social media accounts (though I note all of those offer better options), but banking should be setting the bar higher.

maxsteam

Ash_Pole said:

I don't understand how the people who receive the funds get away with it. The last time I opened a bank account I had to jump through hoops to confirm my identity. And if the fraudster does manage to set up a fake bank account I'm assuming they need to move the money on as soon as possible, do they just go into a branch and withdraw 200k in cash somehow?

It might start with a phishing email or a phone call pretending to be the bank to get the login details and control of the account with the money (or a convincing story to persuade the victim to transfer funds). Then, asap, the money is transferred into another account which the fraudsters have control of. This second account might be an account of a drug addict or it might be an account that was emptied previously which they still have access to. It certainly won't be an account in the fraudster's name. Then the money might be transferred into bitcoins or an overseas account or it might be sent by a Western Union transfer. It will all be done as quickly as possible. It will only be when the funds are safely in bitcoins or cash or a Nigerian/Cypriot/Caribbean bank account that the transfers stop. If one particular route doesn't work, then they will easily find another.

RG2015

masonic said:

RG2015 said:

masonic said:

RG2015 said:

In answer to the OP's question, it does appear that ID checking and attempts at KYC are not working very well. Either the legislation is ineffective or the banks' implementation of these measures is ineffective.

ID checking and KYC usually happens at the beginning of a bank's relationship with a customer, so would be ineffective if the fraudster gains control of an account at any point thereafter. Though the implementation is far from perfect: very few banks insist their new customers participate in a video call or face to face meeting with their photo ID, and many customers would be put off by such a requirement. To make it really effective would probably require the use of biometrics recorded in a national database, but I can picture the outcry if such a thing was a requirement to open a bank account.

When the money is being transferred out of the victim's account it will ultimately end up in the fraudster's account. The fraudster's bank must have a full record of this.

Is it just the case that fraudster's are clever enough to con the bank into accepting whatever ID credentials they submit?

You can't assume it will ever end up in an account in the name of the fraudster, or even an account the fraudster has opened. If it does end up in an account owned by the fraudster, it will probably not be a UK account, or it could be an account the fraudster merely controls, having gained control of from someone else who opened it legitimately. Aside from foreign bank accounts, there are all sorts of e-money services, and related things like cryptocurrency, that could be used to help move the money out of reach. The first hop is likely to be into an account that the fraudster controls either directly or indirectly though someone else. It may pass through and be distributed among several such accounts, and if the fraudster is using money mules, then the stolen funds may reach them as banknotes.

Thanks @masonic. This is now starting to address the OP's original question.

soulsaver

So a supposedly sophisticated and intelligent woman (ex dispute resolution lawyer, founder of chrome radio) isn't aware that if she does nothing, continues looking after mother, and leaves her (and her ma's) money with the bank, it's protection is assured? 

But instead finds the time to engage  with a scammer for 3 days to enable them to empty her and her mother's account? 

I'm not surprised the bank has tended towards a more cynical view. 

Sea_Shell

I don't know the numbers, but I'd bet that more money is being stolen, from vulnerable people, by their own families, than from fraudsters!

Lots of little "thefts" that "no one will notice" rather than a one off scam for £1000s.

Sometimes it's not really theft, as it's given willingly, but under false pretences.     More like emotional blackmail than fraud.

Being talked into being a rental guarantor is probably quite high up on the list.

xylophone

I would really like to have the option of increased security on bank accounts.  Let me set in advance how much can be transferred without first needing to speak to someone at the bank to verify my details etc.  Then have the bank say "Mr Smith, you have set your account to our highest security level and you have informed us that you are vulnerable.  Are you sure you would still like to transfer twenty thousand to a cold caller to buy a carpark space in Portugal?".

The "scammee" was contacted by her bank.....

Catriona's scammer appears to have used all of these psychological tricks. They whipped up a hot state by telling her that money was being drained from her bank account.

They undermined her trust in HSBC by telling her the bank was in on the fraud. That way, when her bank asked her if she definitely wanted to go ahead with the transactions, she ignored them.