I’m desperate. A year ago, I transferred £150,000 from my Virgin Money account to one that I believed to be a one-year fixed-rate bond with Prudential. In fact, it belonged to fraudsters. I discovered it was a fraud 12 months later when the bond was due to mature.
Virgin Money is refusing to refund me because it asked me to verify the beneficiary account before allowing the first payment. I duly checked the company registration number, which did belong to Prudential, and phoned Prudential customer services to confirm it was a genuine company.
If lay customers were always able to successfully verify they were dealing with fraudsters, there would never be any fraud! I had no history of investing large sums of money, and was only asked to verify the details of the firm once before I made the first of seven payments to a Bank of America account.
I’ve since found that M&G (the parent company of Prudential) had reported this account as fraudulent to Bank of America three days before I made my first payment, and a full 17 days before I made the last. If the account had been frozen I would not have lost my savings.
HTY, Ashtead, Surrey
You have distressingly lost your life savings to what is known as a clone investment scam. Criminals set up fake companies using the name, address and firm reference number of reputable brands, and may send sales brochures that link to the websites of the genuine companies. Only the keenest eye would spot the discrepancy in the email and phone number.
The Financial Conduct Authority (FCA) regulator warns that even experienced investors could be taken in. The brochure from the firm that scammed you is sophisticated and convincing, and you were then groomed over many well-scripted phone calls and emails to win your trust. After you paid the money you were sent authentic-looking certificates, and logged into a personal account portal.
Concerningly, you say you had proactively sought out investment opportunities with Prudential, rather than responded to an ad, which suggests your internet search may have landed on a cloned website.
Most major UK banks have signed up to the contingent reimbursement model, which pledges to refund scammed customers who have not been unduly negligent. M&G’s fraud department, in an email to you, confirmed that, in its opinion, you had not been negligent due to the sophistication of the scam.
Virgin Money, however, insists that you were. It says: “Our fraud prevention systems correctly blocked the requested payment. We asked him to ensure the firm he was paying was genuine, and warned that if it turned out to be scam, it was unlikely we would be able to recover the funds.
“We only released the payment at his specific request once he had confirmed he had made those checks and was happy for the funds to be released. Unfortunately, it did turn out to be fraudulent, and we’re unable to support the request for a refund.”
According to M&G, it’s extremely rare for payments into new investment bonds to be made in a number of transactions, yet, despite its initial concerns about the payee, Virgin allowed you to make six transfers of nearly £25,000 each, and a seventh of £982, over the space of 14 days, with no more warnings.
It says that once you had confirmed that the account checked out, it regarded it as a trusted beneficiary. But it appears Bank of America allowed the scam to happen.
Criminals siphon stolen funds through bank accounts that they’ve either “borrowed” from a legitimate customer or set up themselves.
Financial institutions have a responsibility to ensure that their services are not being exploited for money laundering, and it’s alarming that, 17 days after Prudential reported the account as fraudulent, it was still in operation. Bank of America agreed to investigate, but has since ignored my requests for a comment. However, it has decided that it will refund you the full sum.
As scams proliferate and evolve, none of us can be certain we won’t be similarly conned. The FCA publishes useful advice on how to spot a scam, including checking its warning list and remembering the higher the returns promised, the likelier the deal is to be dodgy.
But one company to warm to …
My combi boiler uses a remote thermostat to control the central heating. If it doesn’t work, neither does the heating. A tiny part of the battery tray snapped, which meant the batteries no longer made contact with the terminals. A new thermostat costs more than £200, and so, on the off-chance, I rang the manufacturer, Drayton, to see if I could buy just a battery tray. I was put on hold while the person searched the office, and found what I wanted. And it was sent free of charge.
AC, Wetherby, West Yorkshire
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