Middle classes targeted by conmen in ever-more elaborate fraud scams
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UPDATED:
08:13 GMT, 9 May 2012
One rainy Friday afternoon in February, mum-of-four Laura Clarke burst into tears in the middle of her local bank branch — staff tried comfort her, but were helpless as she sobbed in front of the counters after fearing she would be left with no money to feed her family.
For years Mrs Clarke, a 43-year-old primary school headmistress, had managed the family finances as well as any mother.
But her breakdown in the bank came at the end of months of turmoil that began when criminals stole almost 4,000 from the family bank account. To this day Mrs Clarke doesn’t know how the fraudsters got into her account — but believes they stole her identity or bank details by hacking her computer.
Victims: Mr and Mrs Clarke with their children Catherine, Sam, Lydia and Ella
Neither Mrs Clarke, her husband Martin, nor their children Catherine, Sam, Lydia and Ella had done anything wrong.
Rather, she is just one of the people
who, every two minutes in the UK last year, fell victim to a fraudster.
It is the middle classes who are increasingly being targeted by
ever-more elaborate scams by conmen. Only a tiny percentage of these
crimes is ever solved. But their consequences can haunt victims for
years. Even when a victim receives compensation or their case is solved —
lives are still ripped apart by delays and confusion.
In the case of the Clarke family,
though their bank Santander quickly refunded their missing money, they
were still frozen out of their accounts for nearly two months.
Unable to use their credit or debit
cards, they had to take out what cash they needed for the week by
withdrawing it from the branch using a passport — often having to wait
an hour — for authorisation. Their jobs and busy family lives meant they
often struggled to get to the bank before it closed.
Mrs Clarke says: ‘That day in
February, I was desperate. I knew we needed to go shopping because the
cupboards were bare and the car was nearly empty.
‘We were faced with the horrifying
prospect of being left penniless all weekend as the bank was about to
shut and I couldn’t get permission to have my money. It is terrifying
how easy it is for someone to turn your life upside down in a couple of
key strokes.’
Santander apologised for the six-week
delay. It says following an investigation it will give further training
to staff to avoid customers being inconvenienced in future.
THE SCAMS DESIGNED TO SNARE YOU
Last year, a record 126 a second was lost to fraud.
Half of all victims last year were aged between 41 and 60 — 11 per cent more than in 2010.
And it is middle-class, middle-aged
people who have lost hope of ever getting a decent return on their
savings who are particularly at risk.
The average interest rate on 1,000
has languished at around 1 per cent for four years after plummeting from
around 4 per cent in January 2008, according to figures from data
company Defaqto.
Meanwhile, billions have been wiped off pensions and investments.
Desperate for returns on their money, savers are the perfect targets for sophisticated conmen.
These fraudsters are becoming more and more sophisticated — picking up on new trends and quickly turning it to their advantage.
They use suckers lists: thousands of
people’s details bartered between conmen and pulled from lists of
investors and previous victims.
Current scams involve investments in
fine wine, land, green energy and gold. And they target those desperate
for returns by getting hold of their personal details from websites or
from lists of shareholders of other companies.
DECEIVED BY SLICK SALES PATTER
Major scams to watch out for include
boiler rooms — when a slick salesman rings your home and tries to sell
you investments which they claim will make an amazing profit. The
Financial Services Authority (FSA) watchdog says around 700 people each
year lose more than 20,000 to such scams.
You can protect yourself by never
buying anything from a so-called investment salesman who calls out of
the blue. Put down the phone and don’t be drawn into the salesman’s
patter. Few reputable firms would ever contact you this way. If someone
tries to sell you a piece of land without planning permission, claiming
it will increase in value — run for the hills as it’s likely to be a
land-banking scam.
All too often the plots sold will
never receive planning permission. You stand a good chance of adding to
the 200 million lost on this scam over the past five years.
Identity fraudsters may try to tempt
you into revealing personal details by claiming to be from a bank or
another financial institution and setting up fake websites in a bid to
get you to disclose your personal details.
Remember to update your computer’s anti-virus software to cut the risk of being caught out.
Also ignore emails from your bank
asking you to click on a link, or anyone who claims to be calling from a
bank and asks you to hand over your account details. Instead, call the
bank’s switchboard and ask to speak to the person directly.
Steer clear of other frauds such as
prizes for draws or lotteries you have never entered. Equally, you may
receive a letter from a law firm advising that you have been left
millions of pounds in a distant relative’s will.
To take your share of the cash, all you need do is hand over your bank account details. Respond at your peril.
The FSA is so worried by the growth
of these scams that it recently contacted 76,000 people to tell them
they are on a so-called ‘suckers’ list’ and are at even greater risk of
being targeted.
If you are in doubt about any company,
make sure you search through an internet search engine, which should
reveal reviews of the firm. If the majority of comments or reviews about
a company are negative, this should set alarm bells ringing.
Don’t rely on this, however.
Always check the FSA Register, fsa.gov.uk/register, to ensure a firm is authorised.
If the firm is unauthorised and things
go wrong, you will not have any access to the Financial Ombudsman
(financial-ombudsman.org.uk) or the Financial Services Compensation
Scheme.
THE DREAMS THAT TURN TO DUST
The FSA last year took 5,000 calls
from worried investors who believed they had fallen prey to fake
financial investments. Some are left penniless because they are not
covered by Government-backed compensation schemes that protect savers
and investors. Detective Superintendent Bob Wishart, of the City of
London Police’s fraud squad, says: ‘It makes me angry when our victims
are described as being greedy.
‘The financial crisis and recession
means people have become very distrustful of banks and their faith is
wavering in traditional investments.
‘We recently had one woman call us telling us her husband committed suicide after losing their life savings through a scam.
‘Another lady, who has a son with a
severe disability, lost hundreds of thousands in pounds of the money she
was planning to invest to help him.’
David Tucker, 67, from Twickenham, Greater London, lost 4,200 to a share scam.
A salesman from the company, called Cromwell And Goodwin, contacted Mr Tucker about shares he held in another company.
He was offered 60,000 for the shares but had to pay 4,200 commission.
Mr Tucker, a fire investigations
officer, handed over his cash but never received the money he was
promised. A few days later, a salesman rang and requested a further
payment of 49,000.
This time Mr Tucker declined.
He says: ‘When I realised I had been
scammed, I was furious but I worry that could have lost far more.’ Other
readers told of how they had turned to risky investment schemes. These
may not be fraudulent but your money may be lost if they go bust.
One reader has lost almost 40,000 after putting his savings into a wine investment company called Beaumont Vinters.
The reader, who has a high-flying job at a financial services company, got a call from the firm out of the blue three years ago.
He says: ‘The man on the end of the line seemed very genuine and sounded well-spoken.
‘I thought: “I have got 5,000 in my
bank account earning next to no interest.” I thought at least I was
investing in an asset and if things went wrong I could sell it.’
But today Beaumont Vintners is in
liquidation. Its investors, who range from pensioners to a soldier
returned from Afghanistan, have ploughed in up to 250,000 each into the
company.
However, the firm has just 40,000 assets, meaning they will get back just pennies — if they are lucky.
The reader says: ‘The worrying thing
is that none of us are stupid people. I actually think what we all have
in common is that we were all nice and simply fell for the salesman’s
patter.’
He says he and his wife have had to cut back since losing their cash.
Others, though, have lost any cash
they had. Manufacturing manager Sean Flynn, 49, from Gloucester lost
4,000 of his life savings in a land-banking scam. A company promised
huge returns for his 4,000 investment in a plot of land, telling him it
stood an excellent chance of gaining planning permission.
Mr Flynn says: ‘At the time, property was shooting up in value and I thought I could not lose.
‘The scheme advertised huge returns and promised prime land ripe for development.’
However, Mr Flynn later found there was little chance of the land ever gaining permission.
His money was wasted and the owner of the company then disappeared into thin air, along with his cash.
WHEN THE POLICE ARE POWERLESS
Local police forces are often
powerless or, in some cases, unwilling to act on fraud reports. This can
be because these cases can be so complicated and difficult to unravel
that they do not have the resources to investigate individual cases.
This is usually left to specialist
teams, such as the City of London Police. In other cases, victims are
left hanging on for months.
Grandfather Stephen Manders was passed
between two police forces and left in debt when he fell victim to
fraudsters. The 54–year-old was on holiday in Portugal when he got a
panicked call from his daughter Samantha, 27.
The police had called at his home in
Solihull, Warwickshire, and attempted to seize the 7,500, nearly new
silver Astra he had bought just days earlier. Police claimed the car was
stolen and had to be confiscated.
Mr Manders had seen the vehicle
advertised in a car magazine and followed every precaution — even paying
20 for an insurance policy check from the RAC.
This came back clear, but did not pick up that the car had been cloned.
This is when thieves steal a car, but swap its number plates to a vehicle of exactly the same make and colour.
‘It was heart-breaking. Police drove away 7,500 of my cash that I had worked so hard for,’ says Mr Manders.
His insurance with the RAC would not pay up because a point in the small-print excluded cloned cars.
His case was passed between two police
forces and, nine months later, Mr Manders is still paying off the loan
he took out to pay for the car.
To make ends meet, he has been forced to dip into his life savings.
Police say they have now made a number of arrests.
Detective Superintendent Wishart
advises: ‘If you need to report a fraud, your local police station is
not the best place to do it.
‘The police there might be good at solving local crime, but do not know where to start when it comes to a boiler-room scam.’
Instead, he advises you to contact Action Fraud, the UK’s national fraud and internet crime-reporting centre, on 0300 123 2040.