Vulnerable people should be able to delay bank payments to reduce scams

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A new report says that people who feel at risk of being scammed should be able to get large payments delayed so a friend or relative can intervene.

Q. What’s the problem?

A. The problem is that thousands of older and vulnerable people are being scammed by increasingly sophisticated and determined fraudsters; often fraudsters who target people who have dementia.

Although banks sometimes try and stop large payments being made by vulnerable customers, there’s no consistent approach. Trading Standards commissioned a report from the University of Bournemouth. The report makes several recommendations:

  • Banks and other financial institutions that should recognise that people who have dementia are more at risk of being scammed and they should take measures to protect customers as part of their ‘duty of care’.
  • Organisations that hold personal data should only share someone’s details when they have actively opted in, not opted out. Where a company has someone’s details, it should only be able to hold them for 12 months without asking for permission again.
  • Charities should not be allowed to sell or pass on people’s details – the only exception being where a charity thinks that someone is at risk of harm etc. If charities can’t pass on or sell personal details, it should reduce the chances of vulnerable people ending up on a ‘suckers’ list’.
  • People who feel at risk of being scammed should be able to write to their bank or building society and ask them to delay payments above a certain level (for example, £1,000) by 24 hours.
  • At the start of the 24 hour period, the bank would contact a trusted friend, relative or carer to tell them about the payment.

Q. What are the main kinds of scams?

A. There are a number of different types of scam that someone may use to get an older person to part with their money, including:

  1. Advanced fee fraud: otherwise known as Nigerian or ‘419’ letter scams: here you’re contacted by someone who says they’ve mistakenly received a huge payment that they’re willing to share with you if you help them transfer it out of the country. You have to hand over your bank account details, or – sometimes – send money to release the ‘payment’.
  2. Clairvoyant scams: people who are bereaved are targeted and offered the chance to contact a deceased relative or to predict their future. The aim is to get them to pay for a large number of sessions.
  3. Catalogue scams: vitamins, chocolate, cakes and ‘miracle cures’ are sold at supposedly knock down prices. In fact, the quality of the goods is often very poor or the goods don’t arrive. A variation of this theme is that companies target older people and encourage them to buy things from the company in order to be entered into a prize draw. In reality there’s usually very little chance of winning anything.
  4. Charity scams: scammers take the donations themselves and try and get someone to hand over their bank account details. The scammer may take money from them or use a premium rate telephone number to generate revenue.
  5. Doorstep scams: people are targeted by door-to-door traders, such as builders (offering to fix the roof or to sort out the drive is a favourite tactic). Otherwise the victim may be sold something that’s overpriced or poor quality (such as mobility aids).
  6. Investment scams: cold calling someone to give them the ‘opportunity’ to invest in anything from plots of land to diamonds or wine. The investment may not exist and, if it does, it rarely generates a return.
  7. Lottery or prize draw scams: the scammers contact the victim telling them they’ve won a prize in a draw and they must send a fee to release the prize.
  8. Recovery room scam: people who’ve lost money through investment scams are targeted again by companies that say they’ll be able to get their money back. In reality it’s just a way of scamming them out of more cash.
  9. Romance scams: victims are targeted by people pretending to be looking for romance. In the early stages of the online ‘relationship’ they are very attentive but invariably ask for increasingly large sums of money.
  10. Vishing scam: scammers ring people pretending to be from the police and tell them that their bank account is being emptied by a member of their bank’s staff and that money needs to be transferred into a ‘safe’ account. The safe account is the fraudster’s.

Q. Why does more need to be done?

A. The problem of financial scams and frauds is a growing one. It’s estimated that over three million people were victims of a scam in 2015 and the average amount an individual lost through mail scams is over £1,000. Experts, such as Trading Standards and charities recognise that although anyone is at risk of being scammed, lonely, older people are at a higher risk.

  • Financial scams are often unreported, so the true scale of scams and scamming aren’t known.
  • The way dementia affects many people means that at different times they may have more ability to recognise scams and protect themselves than at other times.
  • Once someone falls for one scam, their name may be added to a ‘suckers’ list’. Trading Standards estimates that the average age of someone who’s on a suckers’ list is 74. Trading Standards have accessed 15 different suckers’ lists with over 260,000 names on them.
  • Being scammed can accelerate a decline in someone’s health.

Related articles:

How to avoid investment scams

How not to fall for a pension scam and to keep your pension safe

What is vishing in banking and how can you protect yourself?

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