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Old 25.01.2017, 10:49
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Recovering a fraudulent payment

A few alarm bells will be ringing in your ears after you have read this sorry tale... The Solothurn police have been informed and a good lawyer in Bern is working on the case.

Over Christmas my friend's e-mail was hacked, and the criminal sent an e-mail to her financial adviser telling him to transfer £30'000 from the account at the Valiant Bank in Bern, to an account at the York branch of the Halifax Bank in UK.

This wasn't noticed as it seems the criminal immediately deleted his e-mails. We have asked GMX in Germany for copies of the e-mail traffic: their reply is that GMX mail is free of charge and they offer no support.

The transfer was commanded on Thursday 5th January and on the evening of Friday the 6th January the money was in the Halifax Bank account. Everyone in Switzerland knew on the evening of 5. January that a fraud had occurred, but nobody could stop the transfer.

The financial adviser told my friend to phone the Halifax (!!) and ask them to stop the payment. The Halifax fraud department was told about the transfer, and the employee said Halifax can't do anything as the fraud was not "Made in England" and then he hung up without giving his name.

Is there any possibility of commanding the Halifax to return the money as it was the result of a fraud? The Swiss lawyer has said the Valiant Bank has done nothing wrong, they followed the financial "adviser's" order who held the power of attorney over the account at Valiant Bank.

Obviously the adviser in Solothurn can be sued, but he is an employee of a Solothurn company, a GmbH, a limited liability company, so there isn't much hope of a successful claim.

Does anyone have any special tips? The Valiant account has been frozen!
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Old 25.01.2017, 11:00
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Re: Recovering a fraudulent payment

My first thought is that the York police Fraud Dept should have been informed immediately as then I would guess the Halifax would have been more "helpful" and could at least have frozen the account that day.

My 2nd thought is that I find it strange that a financial advisor would be able to transfer that amount of cash for a customer just from an email instruction.

Good luck to your friend, I guess they will need it.
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Old 25.01.2017, 11:00
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Re: Recovering a fraudulent payment

Some accounts have an option where transfers which are received by email request are followed up with a phone call from the bank to the (in this case) financial adviser as a double check.

If there is no such arrangement in place then it's unlikely anyone is going to accept responsibility.

It's a bit late now but the client should put this arrangement in place going forward.
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Old 25.01.2017, 11:03
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Re: Recovering a fraudulent payment

why where the uk police not informed?

if the financial advisor followed procedure then there is nothing you can do there anyway.

Why did vailiant bank not inform halifax it was a fraud?

sounds like a whole catalog of errors from everyone involved
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Old 25.01.2017, 11:04
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Re: Recovering a fraudulent payment

It seems something in this procedure:

"https://www.ch.ch/en/reporting-someo...filing-report/"

It says, if you sustained a financial loss, you must file a criminal complaint.
Maybe then the police (??) or some authorities are issuing some kind of document for the banks to block or revert the transaction??

Interestingly, it does not even seems to be classified as "theft" as per Swiss insurances T&CS I am reading now.
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Old 25.01.2017, 11:15
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Re: Recovering a fraudulent payment

Similar case reported in today's Daily Mail.

Be careful out there, folks...
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Old 25.01.2017, 11:19
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Re: Recovering a fraudulent payment

It's pretty common for banks to accept instructions by email.. Of course there are procedures which may involve call backs or other checks, like deciding if the instruction is unusual.. These would be laid out in T&Cs I'm sure.

Banks will only refund if the transaction was their fault or if their procedures failed.
If an instruction was received and executed which didn't trigger an alarm, then the bank is not really at fault. They acted in good faith and can't be held responsible for a client failing to secure their email account.

There's a similar story in your favourite newspaper today about how hacked email cost somebody 30k .

Bottom line is. It's pretty difficult to hack the banks.. It's pretty easy to hack a free email account. The crooks are moving with the times.

One possibility would be to argue that either the bank or the adviser were negligent for not spotting that the instruction was suspicious.
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Old 25.01.2017, 11:21
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Re: Recovering a fraudulent payment

Here:
It could be covered by Art 147 of Penal Code:
https://www.admin.ch/opc/fr/classifi...ndex.html#a147

What is more interesting is this official Swiss agency, as it has a list of the exact law items you can refer:

https://www.skppsc.ch/fr/sujets/inte...smalveillants/

PS: in french, google translate...

Maybe there's good reference there on "what to do", or you can contact them!
https://www.skppsc.ch/fr/contact/
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Old 25.01.2017, 11:23
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Re: Recovering a fraudulent payment

Quote:
Similar case reported in today's Daily Mail.
I see the Daily Mail suffers from the same problem as the 20 minutes, repeating the (foreign) nationality of one of the involved parties even though it has nothing to do with the case...

Am I really so old fashioned to think that any bank transfer should be confirmed with at least a phone call? I know I'm a little fish, but my bank makes me jump through hoops and get a confirmation code before getting anything transferred.

Hope your friend gets things sorted Sbrinz.
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Old 25.01.2017, 11:24
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Re: Recovering a fraudulent payment

The financial adviser is a complete idiot. He has sent my friend paper copies of his e-mail traffic with the criminal.

The following are errors and exceptions,

The criminal spelt her surname incorrectly all the time...
The criminal said she was ill in the UK and needed the money urgently...
The criminal asked him to reply only by e-mail...
Criminal's standard of English was poor...
The transfer was made to my friend's name at Halifax: but name and account number in Halifax do not match up!

The advisor never asked for proof the criminal was indeed his customer...
Why would someone call an adviser, when they could call their own bank? ...
Advisor knows she has a bank account with NatWest, then why transfer to Halifax?...

.

Last edited by 3Wishes; 25.01.2017 at 20:24. Reason: removed mentions of name to help with privacy
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Old 25.01.2017, 11:26
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Re: Recovering a fraudulent payment

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It's pretty common for banks to accept instructions by email.. Of course there are procedures which may involve call backs or other checks, like deciding if the instruction is unusual.. These would be laid out in T&Cs I'm sure.


Not my experience. For the company bank accounts none of our bank will accept a payment instruction by email only and for my private bank accounts only e-Banking will do the job.
Did the adviser set up the transfer online in e-Banking?
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Old 25.01.2017, 11:27
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Re: Recovering a fraudulent payment

Seems like the adviser was negligent. Typical fraud as it´s been going around for some time now.


Unfortunately the name/account number check no longer is done by banks.
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Old 25.01.2017, 11:31
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Re: Recovering a fraudulent payment

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I see the Daily Mail suffers from the same problem as the 20 minutes, repeating the (foreign) nationality of one of the involved parties even though it has nothing to do with the case...

Am I really so old fashioned to think that any bank transfer should be confirmed with at least a phone call? I know I'm a little fish, but my bank makes me jump through hoops and get a confirmation code before getting anything transferred.

Hope your friend gets things sorted Sbrinz.
Last year I transferred 5,000 CHF to the UK, I got 2 phone calls from my bank asking me to confirm that it was me wanting to send the money and that I was sure that there was no fraud involved (ie that I knew who I was sending the money to).
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Old 25.01.2017, 11:32
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Re: Recovering a fraudulent payment

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Banks will only refund if the transaction was their fault or if their procedures failed.
This always irritates me in stories like this.

Certainly the Halifax failed their "Know Your Customer" duties to allow a fraudulent bank account to be opened (presumably, or the rozzers would just go to their registered address). And to simply wash their hands of all responsibility after notification because the transfer was from abroad is just unacceptable.
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Old 25.01.2017, 11:48
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Re: Recovering a fraudulent payment

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...This wasn't noticed as it seems the criminal immediately deleted his e-mails. We have asked GMX in Germany for copies of the e-mail traffic: their reply is that GMX mail is free of charge and they offer no support.
If Germany's laws are not too dissimilar to other countries, you'll probably need a court order to get GMX to cough up copies.

Quote:
The Halifax fraud department was told about the transfer, and the employee said Halifax can't do anything as the fraud was not "Made in England" and then he hung up without giving his name.
At which point, you call back and ask for the name before proceeding. And you keep on until you get someone who is willing to take you seriously. Personally, I think that the response is bollix - the employee was probably too lazy.

Quote:
Obviously the adviser in Solothurn can be sued, but he is an employee of a Solothurn company, a GmbH, a limited liability company, so there isn't much hope of a successful claim.
The company is liable for the employee's cock-up. Worst case - the company has to close because they go bankrupt. I'm not sure, but I seem to recall that the 20K paid into the company at founding has to be available - i.e. the company owners will be liable for at least that. Personally, I think this is your best chance at recovery (or at least some of it). They're unlikely to want to bankrupt their company over a clear case of massive incompetence.

Quote:
Does anyone have any special tips? The Valiant account has been frozen!
Make sure the crime is reported to the British and German police. (The Swiss police could and probably should be doing this). Contact Halifax and keep contacting them until you get a proper response. Raise a complaint through the ombudsman, write to various UK national newspapers.
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Old 25.01.2017, 11:49
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Re: Recovering a fraudulent payment

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This always irritates me in stories like this.

Certainly the Halifax failed their "Know Your Customer" duties to allow a fraudulent bank account to be opened (presumably, or the rozzers would just go to their registered address). And to simply wash their hands of all responsibility after notification because the transfer was from abroad is just unacceptable.

no it seems the halifax account wasn't in the friends name

banks haven't checked names in many many years, I know I was transferring money to my own accounts with the wrong names way back in 2000, all they cared about was account numbers and sorting codes. (just because I couldn't be bothered to update the names - no fraud)

I've never had the bank phone to double check anything, even when transferring the proceeds from the sale of our house in the uk.
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Old 25.01.2017, 11:54
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Re: Recovering a fraudulent payment

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Unfortunately the name/account number check no longer is done by banks.
Our bank does.
We've a a few calls regarding transfers we've set up verifying that it was a legitimate transfer. The most recent was just before Christmas and involved a relatively small amount of money ( around 3000chf) transferred to a workman who had done done work for us.

We have also had transfers refused and sent back by our bank (from our own account in Belgium) because the name didn't exactly match the name on the account.
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Old 25.01.2017, 11:56
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Re: Recovering a fraudulent payment

I get another security check for large online payments - texted passcode.

Mind you, what I call large and what you normal folk consider large are entirely different magnitudes.
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Old 25.01.2017, 11:59
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Re: Recovering a fraudulent payment

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Last year I transferred 5,000 CHF to the UK, I got 2 phone calls from my bank asking me to confirm that it was me wanting to send the money and that I was sure that there was no fraud involved (ie that I knew who I was sending the money to).
I had the same thing when I made the first transfer to a Japanese bank for a game subscription. Immediate contact from the ZKB to confirm this was not a fraudulent action. And this was for 20chf!

I guess I need to be very thankful for the now quite apparent good security measures of my bank!
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Old 25.01.2017, 11:59
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Re: Recovering a fraudulent payment

Lessons learnt by my friend,

GMX e-mail account has been closed
Power of attorney for adviser has been rescinded
Bank account at Valiant has been frozen
Laptop was guarded by G-Data, scanned - no malware
Laptop scanned by adwcleaner, scanned - no malware

She was very slack, only switching the laptop off, & not logging out of GMX e-mail
The e-mail password was too simple

I did tell her off about all this, and now she sees that she left the door open...

The positive aspect is that as this lost sum was just a small part of an inheritance, she hasn't had the time to miss it. The amount has been in the Valiant account since June, it should have been invested in shares, but it wasn't, it just sat in the bank. Another minus point for the "adviser"...

Last edited by 3Wishes; 25.01.2017 at 20:25. Reason: edited a few details for privacy
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