Today Money Mail raises serious concerns around how easily banks have allowed fraudsters to set up accounts used to rob people of their life savings.
We have obtained the details of 82 bank accounts opened by a criminal gang using fake IDs and counterfeit utility bills.
The list, which was compiled by police as part of an investigation into online fraud, shows that the crooks managed to trick nine major High Street banks into letting them run accounts to carry out scams.
Almost half of the accounts were opened at HSBC, which has previously been fined almost $2 billion in the U.S. for allowing Mexican drug kingpins to launder money.
We have obtained the details of 82 bank accounts opened by a criminal gang using fake IDs and counterfeit utility bills
Nationwide allowed 13 accounts to be opened using fake IDs, while NatWest opened 12. Barclays and Santander each had five accounts on the list, Metro Bank was responsible for three and Halifax two. Lloyds and TSB each opened one.
The Metropolitan Police list shows that the fraudsters repeatedly used the same names to open accounts with different banks, suggesting that the same fake ID were being used multiple times.
Money Mail understands that the criminals were using the 82 accounts, among others, to scam shoppers on websites such as eBay. It is feared that this is just the tip of the iceberg.
A police investigation into gangs operating similar scams to the one linked to the accounts has uncovered more than 5,000 victims with losses up to £15 million.
Typically, the fraudsters listed non-existent items such as cars or tractors at attractive prices.
They would then lure customers into making a payment but never deliver any goods. With this type of scam, buyers are often told to send the money directly by making a bank transfer.
Then, as soon as the money arrives in the crook’s account, it is moved on through a series of other accounts so it cannot be traced.
This typically means buyers are not covered by the money-back guarantees offered by websites.
And, unlike fraud cases where a debit or credit card is used, banks also typically refuse to cover the losses.
As a result, it is unlikely that much of the £15 million has been returned to victims.
A police investigation into gangs operating similar scams to the one linked to the accounts has uncovered more than 5,000 victims with losses up to £15 million
The nine banks implicated in the police list obtained by Money Mail refuse to say how much cash they have reimbursed.
However, they say only in rare cases were they able to freeze some of the funds that remained in the fraudulent accounts. This money has been returned to its rightful owners, they say.
Nearly all the accounts are now understood to have been shut down.
Last year, 43,875 people lost an average of £2,784 each to online bank transfer scams.
But just £1 in every £4 was returned to customers. Money Mail’s Pay Back Fraud Victims campaign has called on banks either to track down stolen funds or to cover the losses themselves.
Experts say where banks are found to have allowed crooks to open accounts using fake IDs, they should be forced to take responsibility for any losses suffered by customers.
Money Mail has handed the list of 82 accounts to the City watchdog the Financial Conduct Authority, which says it will contact all the banks involved.
Arun Chauhan, director of Tenet Compliance & Litigation, a law firm that provides advice on financial crime compliance, says: ‘These banks have allowed organised criminal gangs to abuse their systems and steal from thousands of victims. There are more than 80 accounts on this list and half of them are HSBC, which is extremely worrying.’
Almost half of the accounts were opened at HSBC, which has previously been fined almost $2 billion in the U.S. for allowing Mexican drug kingpins to launder money
Banks are supposed to follow strict rules when opening a new account for a customer.
Under money laundering regulations, they must carry out so-called customer due diligence.
According to the rules, this includes verifying a customer’s identity using documents, data or information obtained from a reliable and independent source.
This is why your bank usually asks you to provide photo ID and proof of address before it will open any account. However, fraudsters are routinely getting around these checks.
The Metropolitan Police has launched an investigation called Operation Arad to track down fraudsters who go on to scam online shoppers.
The 82 accounts on the list obtained by Money Mail were uncovered as part of this operation. All were found to have been opened using fake IDs and documents.
The police are understood to have charged 62 people linked to the wider investigation and more accounts are expected to come under scrutiny.
Eight people connected to the 82 accounts have already been jailed for their part in the scam.
Money Mail asked all nine banks how criminals were able to use counterfeit documents to get past their security. We also asked whether they would take responsibility for the losses that victims suffered as a result.
None admit responsibility for allowing fraudsters to open and operate accounts.
HSBC refuses to say how many payments the criminals received, how much they stole, if there was any money left, whether victims were reimbursed, or if the fraudulent accounts had been closed.
A spokesman says the bank ‘worked hard’ to ‘identify and address the ever-changing techniques used by fraudsters’ and continually reviews its checks and processes.
Nationwide says it followed industry guidelines and staff are trained to spot ID documents that are obviously fake. But it admits it’s harder to identify the most sophisticated counterfeits.
The other banks refused to answer specific questions about the accounts but claimed they followed ‘strict’ industry regulations and were confident that their security systems were robust.
They all said they take fraud extremely seriously.
Barclays says it could not identify one of the accounts on the list. It says there was no indication that the accounts would be used for fraud either.
Metro Bank and Nat West declined to comment on the accounts in question and say they are doing all they can to combat increasingly sophisticated scams.
Santander would not comment on the accounts in question, but says it invests ‘heavily in sophisticated technology’ to prevent fraud.
TSB says it was able to spot its one fraudulent account and close it ‘very quickly’.
A spokesman for Lloyds and its sister bank Halifax says the banks always abide by ‘strict regulations when opening an account for a new customer’.
‘Buster Jack’, a former financial adviser in his 60s who uses an alias because he runs a business assisting scam victims by catching out crooks, says: ‘The banks accepted false documents and opened the accounts, surely that’s a breach of regulations? The police are focusing on catching criminals, but who’s investigating the banks?’
UK Finance, the industry trade body, says that banks work closely with the Government and police to identify fraudulent documents and it is developing new ID guidelines which will be published next year.