Banks and fraud markers

Nebulous2

Interesting story in the Guardian today about a person who was wrongly recorded by TSB as a fraudster, rather than a fraud victim, and subsequently had their Santander accounts closed. 

https://www.theguardian.com/money/2025/jan/20/all-my-accounts-were-shut-down-when-tsb-labelled-me-a-fraudster-instead-of-the-victim

Nasqueron

Perfectly normal if someone gets a CIFAS for fraud then other banks will close too. Obviously this one is wrong and hopefully the person will get suitable compensation but the actual process is very sound

Nebulous2

Nasqueron said:

Perfectly normal if someone gets a CIFAS for fraud then other banks will close too. Obviously this one is wrong and hopefully the person will get suitable compensation but the actual process is very sound

I'm not convinced, going by that story, that the process is sound.

I've generally felt, when we see stories on here, that we are only getting one side of the story and there are factors we are not aware of. I've always felt supportive of the process, but then I've never been impacted by it! 

However I think there needs to be some checks and balances. A bank where I've never been a customer, should not be able to claim I'm a fraudster, without me having access to a means to appeal that. That the ombudsman wouldn't consider the case because the person wasn't a customer appears to be a gap. That it took a year, and the intervention of a journalist to resolve, simply isn't good enough. 

Nasqueron

Nebulous2 said:

Nasqueron said:

Perfectly normal if someone gets a CIFAS for fraud then other banks will close too. Obviously this one is wrong and hopefully the person will get suitable compensation but the actual process is very sound

I'm not convinced, going by that story, that the process is sound.

I've generally felt, when we see stories on here, that we are only getting one side of the story and there are factors we are not aware of. I've always felt supportive of the process, but then I've never been impacted by it! 

However I think there needs to be some checks and balances. A bank where I've never been a customer, should not be able to claim I'm a fraudster, without me having access to a means to appeal that. That the ombudsman wouldn't consider the case because the person wasn't a customer appears to be a gap. That it took a year, and the intervention of a journalist to resolve, simply isn't good enough. 

You are possibly misunderstanding me - TSB (wrongly) recorded the person as a fraudster, the process is sound as Santander acted on the fraud marker and closed the accounts - this stops a criminal defrauding multiple banks. TSB were wrong to mark a victim of fraud as the perpetrator but that isn't the process I was commenting on

KittenChops

I used* to work in financial services and was a member of CIFAS for the company I worked for - I used to underwrite personal loan applications
*this information is about 20 years old - so processes may well have changed since then


The article includes this snippet (my bolding):
"Back in 2021, a TSB account had been fraudulently opened in your name. TSB had thanked you for your cooperation with its investigation, then erroneously reported you to the National Fraud Database for three attempts at fraud. Then the fraud markers lay undetected on the database until Santander offered you a higher interest savings account. When you applied, its credit check identified the markers and your accounts were closed."

and further on (my bolding again):
"Both banks jumped to when they saw a headline coming. Santander, which should have questioned the fraud markers before withdrawing its services, promptly reopened the accounts, refunded £223 in lost interest, and offered £150 compensation, which you – and I – consider paltry given the stress and hardship caused. It says: “We’re sorry that a human error meant RL’s accounts were incorrectly linked to a fraud marker that was placed ­incorrectly by another bank and then closed.”"

I remember, having placed a CIFAS marker, passing the case to a colleague to check; this may have been a CIFAS requirement or may have just been our own internal process - I can't remember now.

Santander, once aware of the CIFAS markers, should have spoken to someone at TSB who was also a CIFAS member - this should have revealed the mistake.  Organisations that are CIFAS member MUST NOT decline applications / close accounts without first investigating the markers with whichever organisation(s) that placed them.
If I was the person that this article is about, I would have complained to Santander - and then referred that to the ombudsman if not satisfied with the outcome.

eskbanker

KittenChops said:

Organisations that are CIFAS member MUST NOT decline applications / close accounts without first investigating the markers with whichever organisation(s) that placed them.

Are you aware of any documentation of such rules that's in the public domain?

Zanderman

Nasqueron said:

Nebulous2 said:

Nasqueron said:

Perfectly normal if someone gets a CIFAS for fraud then other banks will close too. Obviously this one is wrong and hopefully the person will get suitable compensation but the actual process is very sound

I'm not convinced, going by that story, that the process is sound.

I've generally felt, when we see stories on here, that we are only getting one side of the story and there are factors we are not aware of. I've always felt supportive of the process, but then I've never been impacted by it! 

However I think there needs to be some checks and balances. A bank where I've never been a customer, should not be able to claim I'm a fraudster, without me having access to a means to appeal that. That the ombudsman wouldn't consider the case because the person wasn't a customer appears to be a gap. That it took a year, and the intervention of a journalist to resolve, simply isn't good enough. 

You are possibly misunderstanding me - TSB (wrongly) recorded the person as a fraudster, the process is sound as Santander acted on the fraud marker and closed the accounts - this stops a criminal defrauding multiple banks. TSB were wrong to mark a victim of fraud as the perpetrator but that isn't the process I was commenting on

But were Santander right to not check why the fraud marker was there and had been correctly applied?  The reported story suggests Santander were at fault for not checking. Which suggests the process is not sound.

KittenChops

eskbanker said:

KittenChops said:

Organisations that are CIFAS member MUST NOT decline applications / close accounts without first investigating the markers with whichever organisation(s) that placed them.

Are you aware of any documentation of such rules that's in the public domain?

I've had a quick google & can't find anything
But, this was a key point, drummed into us at every meeting I attended at CIFAS