Banks legally unable to investigate illegal transfer of funds

littlerock · 11 November 2017 at 3:03PM

Reading a rather worrying story in my paper today. Apparently someone was buying a small van from Mercedes-Benz when her email was hacked into. As a result she received details apparently from M-B of the account to which to send the money online, which were false. The money was stolen.

Her account is with Nat-West and the fraudster's account was/is with Barclays in the UK. She has the sort code and account number. Barclays says there is no money left in the fraudster's account as it was all withdrawn in cash or transferred to other accounts at once. So it cannot help her.

The worrying part is the bank says it is unable to investigate either what happened to the money or the owner of the account used to move it. The Barclays spokesman said, and here I am quoting direct from the paper to be sure I get it right: "Only the police have the authority to investigate the movement of funds and the person managing the bank account. The banks do not have this authority."

This appears to mean that once a fraudster has got the money into a legitimate account, they cannot be touched unless the police decide to investigate. The banks need do nothing and indeed claim that legally they are unable to act even if they have the name and address of the account owner, they cannot touch them.

The newspaper said more than 19,000 people lost a total of over £100 million in online frauds like this in the first 6 months of this year.

shortcrust · 11 November 2017 at 3:12PM

Good. If it wasn't like this it would simply be one customer's word against another. How would the bank know who's telling the truth? People would lose confidence in bank transfers.

[Deleted User] · 11 November 2017 at 4:33PM

The sad fact is a lot of these accounts that money is paid into are mule accounts, where the criminals get naive people to have money paid in and then transfer it on outside the UK.

The banks act on instruction from their customer - imagine all the posts on here if the banks refused to process a transaction. I've actually seen it (I work in the "financial crime" space) where people, even if told not to send money because it's a scam, send the money!

I think the Payment Systems Regulator is looking at this now to see if banks can compensate people in some circumstances. Even so, we are all responsible for checking whether the payment is going to a legitimate account or not.

Nebulous2 · 11 November 2017 at 5:03PM

Have you received any letters recently about changes to your bank acount terms and conditions?

One of the changes coming in next year is where a payment is made in error and the person receiving it refuses to return it the bank will hand over their name and address so you can take them to court.

takman · 11 November 2017 at 8:43PM

littlerock wrote: »

Reading a rather worrying story in my paper today. Apparently someone was buying a small van from Mercedes-Benz when her email was hacked into. As a result she received details apparently from M-B of the account to which to send the money online, which were false. The money was stolen.

It's unlikely her email was actually hacked, she probably just fell for a phishing scam and someone gave out her password.

Also you should never trust an email. When sending an email you are able to choose the "from" address that the recipient sees and there are plenty of websites to do this. So anyone can send and email and make it appear to be from any email address they choose.

Also i almost always send a small payment first when paying new payees (even my own accounts) then check that it has been received before sending any more.

GingerFurball_2 · 11 November 2017 at 11:58PM

For some reason you seem surprised that it is the job of the police to investigate criminal activity.

meer53 · 12 November 2017 at 1:18PM

If someone chooses to send money to an account using details they are given, why would you think the banks should investigate ? Banks do cooperate with the Police in cases like this but it's a POLICE investigation, not a BANK investigation. The bank aren't at fault here.

pmduk · 12 November 2017 at 2:12PM

GingerFurball wrote: »

For some reason you seem surprised that it is the job of the police to investigate criminal activity.

Sadly it will come as a surprise to many police forces that they're supposed to investigate crimes rather than just record them!

Eco_Miser · 12 November 2017 at 2:39PM

takman wrote: »

Also you should never trust an email. When sending an email you are able to choose the "from" address that the recipient sees and there are plenty of websites to do this. So anyone can send and email and make it appear to be from any email address they choose.

And you don't even need a website to do it, just configure your email client (in)appropriately.

Whenever you get an email that purports to be from someone you are buying from (or through), don't just believe the displayed address, look at the message source (control+u on Thunderbird) and decide if the various 'Received: from' lines make sense for the alleged sender, and match previous communications from them, and if there's the slightest doubt, contact them using a known good method.

derps · 12 November 2017 at 3:08PM

What sort of "investigation" do you expect the banks to do in these circumstances, exactly? Would they have detectives driving about in marked patrol cars knocking on doors, could they arrest people? Maybe they should have guns and helicopters.

littlerock · 12 November 2017 at 4:00PM

I am a bit surprised at the tone of some of these replies. There does not seem to be any dispute in this case that the woman was subject to an email hacking scam of some sort. Indeed I have read of a number of these this year where someone's company email account is hacked by criminals who then lead the owner to transfer money to a fake account.

In cases where a crime has been committed, in an ideal world it is reported to the police fraud team who investigate with the cooperation of the banks. What if the police fail to investigate, claim they are understaffed or have other priorities? Does the bank leave the account untouched to be used to defraud someone else?

http://www.dailymail.co.uk/news/article-3247176/How-police-ignore-cybercrime-Just-one-100-cases-investigated-despite-number-online-fraud-cases-rocketing-recent-years.html

Banks legally unable to investigate illegal transfer of funds

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