Category: Fraud

New Banking Code on Fraud

Authorised Push Payment (APP) fraud is where a fraudster convinces the victim to transfer money to them, usually under the guise of an authority, the victim’s bank or a supplier. Once transferred, the money is likely to be transferred again and then difficult if not impossible to retrieve.

Traditionally the banks have treated these frauds as being the victims own fault and normally refuse to provide reimbursement. However many of these frauds are very sophisticated and difficult for the victim to know they are being defrauded until it is too late.

Also, the banks practice of simply following instructions and sending money to anyone at any account without any checks means they do little to prevent these frauds and often act too late after they are informed of a problem and the money and the fraudster are gone.

A new draft voluntary code for banks aims to make it more difficult for the perpetrators of these frauds and more likely for the victims to get recompense.

The new code establishes the principle that if customers take “the requisite level of care”, they should be reimbursed by their bank.

However, the code does list eight ways that banks can justifiably refuse to reimburse customers who have been defrauded. These include cases where customers:-

  • refuse to heed warnings from their bank
  • “recklessly share” their security credentials
  • fail to take steps to make sure they person they paid was who they thought they were
  • fail to be honest with their bank
  • are “grossly negligent”
  • fail to heed a confirmation of payee result (see below)

Questions also remain about who is liable when both the bank and the customer appear to have taken all the necessary steps to prevent fraud.

Customers were scammed out of £503.4m between January and June, according to the finance industry’s own research.

Favoured methods include duping victims into paying in advance for a product or service that doesn’t exist or impersonating a trusted organisation such as the police.

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Noel Edmonds and Lloyds Bank Fraud

The website at http://noel.world/  Is Noel Edmonds website covering his battles with Lloyds Bank.

http://banklloyds.claims/   is about media coverage of Noel’s fight with Lloyds.

Noel Edmonds is well known as a radio presenter from the 70s and latterly as a TV presenter and game show host. He was also a businessman who built several businesses but then lost almost everything due to the actions of his bank HBOS.

Lloyds bought HBOS bank in 2009 to rescue it from bankruptcy and with it came a Pandora’s Box of issues including corruption and deliberate damage to many of Britain’s small businesses.

What Happened

The Reading branch of HBOS carried out practices that deliberately and systematically ruined small businesses and the team led by Mark Dobson made a great deal of money from this.  Mark Dobson was jailed for dishonest conspiracy in February 2017.

Tthe bank had referred small businesses to a corrupt turnaround consultancy, Quayside Corporate Services, where they were then loaded with debt and looted.

Unique, a holding company for several of Noel Edmonds’ business interests, had taken a loan that was secured against its assets, including shares in UBC, another company owned by Noel Edmonds.

When Unique needed to repay its loan, it could have sold shares to get the money but under the contract with HBOS this could only happen with agreement by HBOS. Dobson and crew refused that permission – preferring the company to go bankrupt.

It gets very complicated after that, but the courts found serious criminal behaviour had occurred and you would think that would be sufficient for Lloyds to investigate the truth and compensate those damaged by the criminality.

The circumstances of the company’s failure are now the source of a bitter dispute between Lloyds and Mr Edmonds. Noel Edmonds is seeking £300m in compensation over claims that HBOS and its disgraced former employee in Reading, Mark Dobson, deliberately destroyed Unique a decade ago.

Lloyds has faced severe criticism for its treatment of the scores of small businesses that were victims of the fraud, which may have cost the bank more than £1bn. Lloyds denied that any wrongdoing had taken place for more than a decade and refused to compensate those who were affected.

Events finally forced Lloyds to say it regretted and apologised “for the effect the criminality relating to HBOS Impaired Assets Office in Reading has had on customers and we continue to make good progress in the customer review in settling compensation, with 60 per cent of customers now having received offers”.

The bank said it was progressing with mediation in Mr Edmonds’ case “where all these points will be addressed, through the proper legal process”.

However, they have not paid up.

Bankers have only themselves to blame for the mistrust many feel towards them.

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Fakespot Identifies Fake Reviews

The website at www.fakespot.com/ was created to “Bring trust back to the Internet” say the owners.

Fakespot is a data analytics company that wants to change the way people read reviews and similar content.

They believe that authentic user reviews are just about the best thing to come out of the Internet. However, the user review system is often abused by sellers that pay for reviews, by companies trying to make their competition look bad, and technologies that pretend to be real reviewers.

How to Use Fakespot

Fakespot can scan all of the reviews for any product or service you select on Yelp™ or Amazon™, Trip Advisor and Apple APP store and tell you whether the reviews are generally reliable or generally unreliable through the letter grade system.

With so many online shopping options, a strong or weak product review can have a huge impact on whether or not a purchase is made. The credibility of these reviews is undermined by businesses who leave fake reviews for themselves or for their competitors – or by individuals with an undisclosed bias.

Fakespot does not review products so cannot tell you how good a product is, it simply analyses the existing reviews looking for patterns that indicate authenticity or otherwise.

Fakespot uses various techniques to evaluate the authenticity of reviews, including:-.

  • English language pattern recognition
  • The profile of the reviewer
  • Correlation with other reviewer data

The algorithm uses machine learning to constantly improve itself by looking at profile clusters, sentiment analysis and cluster correlation. We use artificial intelligence that has been trained to pick up on patterns. The more data that flows into the system, the better the system gets at the detecting fakes.

Amazon unverified reviews are considered unreliable by Fakespot because when the system associates a product review with a product purchase, that review is from a “verified purchaser”. These reviews are in most cases reliable, since Amazon has already confirmed an actual purchase of the product being reviewed.

But, if an Amazon review is not from a ‘verified purchaser’ there is no way of knowing for sure if the reviewer even used the product. While it is possible that a reviewer could have purchased the product elsewhere and left a review on Amazon at a later date, without purchase verification, it is impossible to tell.

Also, Fakespot systems have shown that most paid reviews come from unverified purchasers.

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The Impact of Fraud on Victims

As part of the government’s annual figures on fraud, they include ‘experimental’ figures of different ways to analyse the data.  This includes statistics on the emotional and physical impact of fraud.

These show that where there has been financial loss, the most common effects are:-

  1. To feel ashamed, embarrassed or to blame oneself
  2. Loss of time / inconvenience
  3. Stopped using specific websites
  4. Time off work
  5. Physical health problems

Where there has been full or partial reimbursement of losses, there is a lot less of the negative feelings of embarrassment, shame and self-blame.

However, many people do not report any such symptoms.

If you are a victim of fraud – do not blame yourself as the fraudsters get a lot of practice in such deceit and successfully deceive people of all ages, races, level of education and expertise.

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