It’s a fine time to be a criminal, there’s no doubt about it.
Unscrupulous thieves can access countless victims from the comfort of their bedrooms, thanks to the technological advancements that have improved our lives but also made us more susceptible to crime.
The COVID pandemic that confined many of us to our homes and had a catastrophic effect on our finances has left many conducting much of their business online and many others looking for fantastic bargains and get-rich-quick schemes. Those schemes, that seem too good to be true, generally are.
But victims’ susceptibility is manna from Heaven for scammers.
The most common financial scam in the UK today is Authorised Push Payment (APP) fraud. In 2023 APP scams cost the economy more than £450million.
Carrying out such a scam is case of simply conning unsuspecting victims and convincing them to send money via bank transfer under false pretences.
The account receiving the money is controlled by the scammer and the victim will never get the product or service they believe they’re paying for. The money they’ve sent is gone, perhaps forever.
One of the major problems that victims have, once they realise they’ve been had and they want to try to recover their money, is that they have logged in to a secure account, probably on their own device, and authorised the transfer in good faith, believing the recipient to be genuine. Because of this, many banks may try to refuse their account holders the money that has been sent, claiming they were grossly negligent in falling for the scam.
However, although customers will need to show they didn’t authorise the transaction, the onus is on banks to prove why they are refusing a refund. This may rest primarily on whether the customer was indeed negligent and if they knew that money was going to leave their account.
The bank will also need evidence to show that the transfer was authorised – and the fact that the customer’s password, PIN or card was used is not, in itself, enough proof. If the bank can’t prove that the victim didn’t do their due diligence and insisted on the transaction be made, they should reimburse them in full.
If they conclude that both customer and bank could have done more to combat the scammer then they may choose to reimburse a fraction of the loss, most likely half.
Legal precedents
If it’s a landmark court case you’re after, to shed light on how difficult proving such things in law is, then consider the case of Philipp v Barclays Bank UK Plc, a long-running battle in which the Supreme Court handed down its decision in July 2023.
Fiona Philipp sued the bank after she became the victim of an elaborate scam. In 2018 she was tricked into making transfers of £300,000 and £400,000 to two bank accounts based in the United Arab Emirates. She was conned into believing a fraudster was a member of the Financial Conduct Authority (FCA), working in conjunction with the National Crime Agency.
Mrs Philipp and her husband Robin were told that fraudulent activity was taking place at the bank holding the husband’s savings account and that he should move his money immediately, into an FCA ‘safe’ account, details of which they were happy to give the unsuspecting couple.
They visited different branches of Barclays and gave instructions for the transfers to be made to the United Arab Emirates-based bank accounts.
They confirmed more than once on each occasion that they wanted to proceed with the transfers. Mrs Philipp’s husband Robin even told the clerk he had previous dealings with the firm in UAE, which was untrue.
When the truth, and the sheer scale of the fraud, became apparent some time later, the couple even refused to cooperate with the police, as they had been instructed not to do so by the scammers.
Mrs Philipp complained to Barclays and later brought proceedings against them, claiming that the bank had failed in its duty of care to protect her. Banks have an implied duty of care – known as the Quincecare duty – to their customers, and should refrain from executing a payment instruction if there are reasonable grounds to believe they are being misled and defrauded.
With the potential for fraud evident, she claimed the bank should have taken better steps, blocked her account and prevented the loss of such a large amount. However, Quincecare is not a rule of law and, since the customer was unequivocal in authorising the payment to be made, the court decided it could not be applied to the case.
The court also found that Quincecare duty couldn’t be applied to the Philipps’ APP case as it directly conflicts with a bank’s general duty to act upon their customer’s instructions.
Barclays were found by the court not to be liable to reimburse the Philipps, and their £700,000 was lost.
Cases like these, sadly, are not uncommon.
Many banks have signed up to the Contingent Reimbursement Model (CRM) Code, a voluntary industry code that requires signatories to reimburse APP fraud victims in some cases. However, it does exclude payments made internationally (as is the case with many APP scams) and is only voluntary, with banks being able to apply different approaches to their dealings with victims. This means many who have fallen foul of these scammers may receive different levels of protection, depending on who they bank with.
They are, in any case, required to make reasonable efforts to recover a victim’s money, even if they aren’t liable for their loss, and should try to cooperate with the receiving account’s bank to assist.
If you ever fall victim to these callous conmen (and women) you need to contact your bank, building society or card provider immediately. They may be able to either stop the transaction before the money leaves your account or recover it from the recipient account. The bank at which the thief’s account has been set up may be able to freeze it, stopping them from either accessing the money or transferring it to another, possibly legitimate, account.
You’ll need to act fast, before the criminal can move your money on.
And if your hard-earned cash isn’t retrievable you may still have courses of action open to you, but you must seek legal advice if you are to greatly improve your chances of a successful outcome.
If you have fallen victim to callous APP scammers, and you have been unable to obtain any reimbursement from your bank, you should seek legal representation and consider making a claim for compensation. Barings Law have the legal expertise to professionally prepare your claim and approach your bank with a view to recovering your lost money.
Our legal teams work on a no-win no-fee basis, so there’s no possibility of you suffering further financial losses by employing our services. If we don’t win your claim for you, there’s no charge.
At Barings Law, your legal concerns are our top priority. Whether you need guidance on a complex legal matter or have questions about our services, our team is ready to assist you.
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