Banks and financial institutions build up lists of fraudsters and dodgy businesses and try to varying degrees to protect their clients from those companies.
They identify dodgy companies largely through customer queries, complaints and disputes over card payments.
These blacklists are secret because if made public, the institution would have to provide evidence in each case where the company challenged them. Where they have such evidence it is passed to the Police,
but having proof of a scam is very different from warning people of a company that may have dodgy practices.
The lists may include so called ‘legal scams’ such as copycat firms which charge excessive fees for official services such as passports, driving licences and European Health Insurance Cards. This is not illegal, but it is morally wrong.
They may also include photographic and modelling agencies, timeshare sellers, firms selling computer software and security packages and investment companies.
Websites that offer free trials for beauty products but fail to make it clear shoppers will automatically be signed up for expensive subscriptions can be included.
Some may push unnecessary insurance such as cover for products.
Nationwide also blocks payments to illegal companies such as investment firms identified as scammers by the financial watchdog.
When a customer tries to make a card payment to one of these black-listed companies the bank will block it.
Each bank has its own blacklist. Britain’s biggest building society, Nationwide, says it blocks payments to more than 1,000 companies.
Lloyds Banking Group says about 1 per cent of payments are registered as high-risk.
If you see these sorts of dodgy company dealings, do tell your bank.
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