Comment

'Criminals tricked my grandmother out of £100,000 by posing as Halifax's fraud squad'

Bank fails to spot fraudulent activity and claims grandmother is negligent

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Dear Katie,

My grandmother was targeted over the phone by a scammer posing as Halifax, her bank.

She was told she needed to move money out of her account for her own safety. Her recollection of the exact contents of the calls is a little hazy, but she distinctly remembers being put under a huge amount of pressure to make the payments right away. 

She was told her money was at risk of being stolen by criminals unless she took action. She was instructed not to tell anyone – including friends and family – about what she was doing.

She was told to say the payments were for her granddaughter’s beauty parlour, which of course does not exist.

On four separate occasions in April 2021 my grandmother visited her local Halifax branch and transferred a total of £100,000. At least two of the transfers were processed by the same middle-aged female bank teller. 

My grandmother is adamant that on each occasion bank staff did not question the payments, ask how she had been contacted or confirm that she had verified the payee.

Weeks passed and still my grandmother had no idea she had been scammed. 

Then in June she was contacted again by the same gang. This time she was pressured into moving money from her Barclays account and visited her local branch in the same way. 

But unlike Halifax, Barclays asked basic questions about the payment and immediately flagged it as a potential fraud. The teller quite rightly refused to wire the money and phoned the local police.

At first my grandmother was so deeply ashamed that she had been conned that she hid it from even her closest family. 

As soon as we found out, some months after the crime, we encouraged her to complain to Halifax. Initially it said it would not refund her a penny, but when I got involved on her behalf it agreed to return half the money. It admitted some of its own failings but still maintained that my grandmother had been negligent.

I would be so grateful if you could help to retrieve the remaining £50,000. All of this hit my poor grandmother’s self esteem as hard as her bank balance.

– Anon

Dear Reader, 

This scam is a classic recipe for extortion that, when deployed on the right victim, is highly effective. I’m afraid your grandmother was perfect prey. 

With your grandfather not long dead, she has been meandering alone through the life that they once shared, putting on a brave face to mask her waning confidence. She is frail and you say your mother was beginning to think of taking control of her finances even before this happened.

Some people reading this may think such a ruse should have been obvious. They may even believe your grandmother should have known better. As difficult as it is for those with extensive digital know-how to empathise with someone with none, this kind of assessment would be an incredibly lazy one.

Like many from her generation, your grandmother is technologically illiterate, never having owned a computer or a mobile phone. She doesn’t even know how to access the internet. 

Through no fault of her own, she did not possess the tools to fend off a gang of highly sophisticated criminals. So why in the world should she be punished for that? The answer is: I don’t think she should be.

In my opinion your grandmother easily meets the banks’ definition of a “vulnerable person”, which means that Halifax was under obligation to treat her with extra care when she fell victim to fraud. 

Yet from what I can see, the way her case was handled was entirely inappropriate. In its assessment that your grandmother could and should have done more to protect herself from harm, Halifax failed to recognise any of her apparent vulnerabilities. Given her circumstances, it was unrealistic to expect her to have outsmarted the fraudster. Cases such as hers are exactly why the banks’ defences are so vital to keeping customers safe.

Conversely Halifax, which supposedly has robust defences in place against such crimes and could reasonably be expected to detect and block suspicious activity, repeatedly failed to do so at the most basic level. 

First, your grandmother was not sufficiently questioned in the branch. Halifax says its staff did ask questions but, as Barclays showed with its subsequent success at stopping the scammers by asking the right questions, it fell miserably short.

And second, Halifax’s anti-fraud systems failed to flag the transactions as suspicious, which I find astonishing given their textbook nature. 

When the bank recorded a pattern of unusually large transactions, it should have phoned your grandmother to run fraud checks or frozen the payments. Either of these actions could have prevented the theft.

What I find shocking about this case is not just Halifax’s failure to detect and prevent textbook fraud, it is the failure to recognise its own incompetence and treat fairly an elderly victim of crime. 

Ultimately it compounded and prolonged her stress and upset. 

So I asked Halifax: were these failings a one-off that fell well below Halifax’s usual standards or was there a major systemic problem with its fraud detection and aftercare system that needed to be urgently reported to the Financial Conduct Authority, the City regulator?

A couple of weeks later, Halifax agreed that your grandmother should have been fully reimbursed for her £100,000 loss in the first place and sent her the missing £50,000 with interest, plus an extra £500 to say sorry. 

It said it had reviewed the case and acknowledged that it could have taken further steps before processing the transfer requests, which it admitted might have helped stop the scam from happening. 

It also said it had not previously been made aware of any information relating to your grandmother’s health or personal circumstances that would be considered “vulnerabilities”.

A spokesman for Halifax said: “We have a great deal of sympathy for the customer, who was the victim of an impersonation scam. It’s important for people to remember that if a cold caller tries to rush you into making a payment, you should hang up immediately as a genuine company would never do this.”

While I’m pleased that Halifax has now apologised to your grandmother for not reimbursing her sooner, I’m still not convinced there isn’t a wider problem with banks failing to protect and treat fairly innocent victims of scams. 

Britain’s biggest banks have a combined stock market value of hundreds of billions of pounds and yet criminal gangs are able to penetrate their armour and steal money from the likes of your grandmother. Halifax needs to start playing fair on refunds and bolster its defences, pronto.

Financial Ombudsman forces NatWest to cough up £115,000

Readers may remember the case of a recent divorcee who was conned out of £240,000 in a highly sophisticated cryptocurrency scam

It was in 2020, at the height of the pandemic, and her bank, NatWest, was being as good as useless, making a series of errors while investigating her case. It was only after months of pressure from me that it eventually coughed up half of her losses, around £115,000. For the rest, it said she would have to take her case to the Financial Ombudsman Service.

I was so pleased to hear during my maternity leave that the ombudsman had provisionally found in her favour. But NatWest disputed the findings and it seemed that the case might be pushed to a so-called “final decision”.

However, I am pleased to say it never got that far. Last month the reader let me know that NatWest had agreed to pay her the remaining £115,000, plus interest and £250 compensation.

As thanks for my help she has donated £1,000 to feeding some local donkeys and has also made a sizable payment to the British Red Cross’s Ukraine appeal.