Our client ‘Gemma’ enlisted the help of Barings Law after she fell victim to a purchase scammer and lost nearly £18,000.
Gemma was persuaded to send money abroad via a number of transfers as payment for two diamond bracelets and for cosmetic surgery procedures. Although unemployed at the time, she had been running an Etsy shop and this was providing her with a monthly income of up to £5,000.
She had been in regular contact with a woman, ‘Philippa’, who claimed to live in Belgium and work in the diamond industry. For years, the two communicated on a daily basis and Gemma trusted her as she considered her to have become a close friend.
She was shown pictures of the bracelets and during a video call and agreed to buy them, paying via eight instalments. The plan was for Gemma to fly to Belgium to pick up her bracelets from Philippa in person.
She also arranged with Philippa to meet in Iran, where both would undergo cosmetic surgery, something her friend claimed to have done regularly. Gemma felt comfortable leaving Philippa to arrange their surgeries and take care of the travel arrangements, including visa applications for both of them. She sent another four payments to take the total amount of money she had transferred over a six-month period to more than £17,700.
Gemma flew to Belgium to collect the bracelets, upon which Philippa refused to meet her, making a number of excuses including claiming she had moved to Morocco. She refused Gemma’s offer to pay for her to fly back to Belgium and began ignoring her messages. This was when Gemma started to become suspicious.
Months later, she did receive a package from Philippa and, during a video call with her, she opened the parcel, which was empty.
Gemma contacted her bank, disputing the transactions, and they opened an investigation into the scam. Gemma had never previously paid more than £50 in a single transaction from the account in question, and felt that her bank should have intervened. She received no warnings and no preventative measures were put in place. In retrospect, she thought this was strange as she had often been warned before and asked to verify that her transactions – for much smaller amounts – were genuine.
The only update she received from her bank regarding her complaint revealed to her that the account into which she had made the 12 payments had been emptied of all funds.
She contacted Barings Law and our legal experts contacted her bank to make a claim for compensation. Gemma told us that losing “everything” had greatly affected her, both mentally and financially. We contacted her bank and put the argument to them that they should have intervened, based on Gemma’s transaction history and the unusual nature and frequency of the payments being authorised.
Our banking fraud department put it to the bank that they failed in their duty of care to Gemma and, had they identified their customer’s unusual spending habits in such a short space of time, they would have had reasonable grounds to intervene and prevent her from losing any more money.
Gemma’s transactions were out of the ordinary, given the frequency and the unusually high amounts she was transferring. It bore all the hallmarks of a scam and the bank should have identified this, or activated the necessary processes and procedures in place to protect their customer from fraud.
Gemma’s bank initially refused to uphold her Authorised Push Payment (APP) complaint, stating that, as the money had been sent internationally, it fell outside the Contingent Reimbursement Model Code. They also considered there to be no reasonable grounds for them to believe that there was an intent to deceive Gemma from the start of the contact from the scammer who, had, over time, established a friendship with Gemma.
The bank did credit her £50 by way of an apology for such a lengthy duration of their investigation. Understandably, Gemma disagreed with the outcome and, after discussions with our legal experts, her complaint was submitted to the Financial Ombudsman Service (FOS).
The FOS advised that, after they had contacted the bank, they had made an offer to refund 50% of Gemma’s losses to her, plus interest at the same rate as the savings account from which she had transferred the money. This amounted to £8,635.19* and represented a major turnaround in the bank’s view of a highly distressing situation. Gemma accepted their full and final settlement of her complaint.
* Amount awarded is before fees and disbursements.
