Peter Smith says he is an honest man. A retired woodwork teacher, he has worked all his life and would never contemplate keeping something that wasn’t rightfully his.
But it was this integrity that led to the 73-year-old grandfather being robbed of £7,000 by a telephone fraudster.
And as Smith himself authorised the bank transfer in good faith, he now has no idea if he will get his money back.
Smith spoke to HuffPost as UK Finance published a report revealing £145m was stolen from UK banking customers in the first six months of this year as a result of authorised push payment (APP) scams, where people are conned into sending their money to another account.
While unauthorised fraud victims are usually refunded by their banks, most victims of APP fraud don’t get their money back as legislation means they are liable for any losses incurred if they authorise a payment themselves.
Peter Smith is just one of many people who have fallen victim to criminals who use this method, often preying on older people who may not have a sophisticated knowledge of internet banking.
Smith says while people who are taken in by scams often feel foolish and embarrassed, he is telling HuffPost UK his story to warn other people about the convincing, sophisticated and underhand tactics of scammers.
“I feel absolutely gutted as you work hard all your life and expect to be comfortable in your retirement, but now the money I had saved has gone”
The grandfather of five, who lives near Preston, Lancashire, said: “When I realised all my accounts had been cleared, I felt sick, tearful, upset and I was worried about how I would pay my bills.
“I feel absolutely gutted as you work hard all your life and expect to be comfortable in your retirement, but now the money I had saved has gone.”
Smith came home one day in August to find a message on his answer phone claiming to be from his phone company TalkTalk, asking him to call as they had noticed a problem with his phone line.
He ignored it, but the following day he received another message and was put through to what sounded like a call centre in India.
“This didn’t raise any suspicions at all,” he said. “Whenever I’ve had any issues with TalkTalk in the past, I’ve been put through to India and they have always been very good and any problems have always been sorted.”
A man told Smith they’d noticed he was having problems and asked if his computer was running a bit slow. As it was completely their fault, they said, they would arrange for a new router to be sent out and compensate him by putting £200 into his account.
At some point during their one hour conversation, Smith says “he then told me to press some keys on my computer and said the screen would go blank and then I would see a lot of numbers coming up in red.
“Sure enough, this happened and these gobbledygook numbers came up on my computer screen. He told me to tell him when they went green, so I did.”
The fraudster then told Smith that to pay the £200 into his account, he just needed the three numbers on the back of his card “for his own security” and the unsuspecting pensioner gave him the numbers.
To his astonishment, Smith was then asked to press a combination of keys and saw his bank details come up on screen.
“I have no idea how he did it but there were all my bank details showing my recent transactions and at the top, it showed £200 had been paid in.”
Then something even stranger happened.
“As I was looking at the screen,” Smith said, “the figure £7,200 came up. So I said: ‘Hang about, you’ve paid me £7,200.’
“He thanked me for being honest and told me he was going to be in trouble for his mistake.
“After umming and ahhing over what we could do, he told me I needed to pay the £7,000 back.”
“Silly me, being the kindhearted chap that I am, I did as he said”
“I got a pen and paper and wrote down the name, the account number and the name of the bank he wanted the money paying into which was a Halifax in London and I went into the bank within the hour.”
The Natwest bank adviser in Preston, where Smith went in person to make the payment, did ask him if he was being forced to hand this money over by anyone. “I wasn’t,” he said, “so I said no.”
“Then she asked if I knew the person I was sending the money to or had spoken to them and I said yes, as I’d spent an hour talking to the man.”
The next morning Smith went to a cashpoint to withdraw some money and when he pressed: ‘Check balance’, it came up saying zero. ”At that moment,” he told HuffPost, “the penny dropped.”
Smith has three bank accounts at Natwest – his main current account, a holiday account and a cash ISA.
To his horror, Smith realised a total of £7,000 had been taken across his three accounts leaving him with no money.
The pensioner says he now believes that while the man was talking on the telephone, he accessed Smith’s cash ISA and current account, managed to open an online bank account in his name and transferred all the cash available into this online bank account. So when Smith transferred the money, it was actually his own money he was sending.
When Smith relayed the details of the fraud to Natwest, they contacted the police and also informed their own fraud team and the Halifax bank where the money had been paid into.
But for Smith, the matter was more pressing, as he still had three weeks until his pension was paid.
“Luckily, I have great friends and family and they offered to lend me money,” he said. “So I borrowed from them so I could pay the bills. Without them, I don’t know how I would have coped.”
The experience has, understandably, left him rattled. “How could this man set up an online bank account in my name and how was he able to transfer three accounts into one?
“I still have not got my money back and haven’t heard from the bank or the police.
“I have no savings anymore and just have to wait every month for my pension to come in and not spend as much. I am only spending on what I need such as food and bills. I cannot afford any luxuries.”
HuffPost UK contacted Natwest Bank about Smith’s case. A spokesman said: ”We sympathise with our customer and appreciate that this has been a very distressing experience for them.
“At NatWest we take scams very seriously and will always help our customers in recovery of their funds on a best endeavours basis.
“We would remind customers to remain vigilant against any type of scam and they should never make a payment at the request of someone over the phone purporting to be from their bank or internet service provider without independently verifying it using a trusted phone number.”
As well as the £145m lost in the first half of this year to “authorised push payment” scams, £358m was lost to authorised fraud which includes any transactions made without the account holder’s knowledge.
However, while unauthorised fraud victims are usually refunded by their banks, most victims of APP fraud don’t get their money back as legislation means they are liable for any losses incurred if they authorise a payment themselves.
But now a body set up to look into this issue is proposing new rules which could mean that bank account holders who are tricked into transferring money to fraudsters could be entitled to reimbursement if they have acted with the ‘requisite level of care’.
The voluntary code has been drafted by a steering group set up by the Payment Systems Regulator.
However, it has not been resolved who will pay for compensation if the bank has also acted with care.
A final version of the code is expected early next year.
To stay safe, customers are urged to follow this advice:
- A genuine bank or organisation will never contact you out of the blue to ask for your PIN, full password or to move money to another account. Only give out your personal or financial details to use a service that you have given your consent to, that you trust and that you are expecting to be contacted by
- Don’t be tricked into giving a fraudster access to your personal or financial details. Never automatically click on a link in an unexpected email or text.
- Always question uninvited approaches in case it’s a scam. Instead, contact the company directly using a known email or phone number
If you believe you have been a victim of fraud, contact Action Fraud, the national fraud and cyber crime reporting centre on: 0300 123 2040