Posted on 27-05-2010
[The Times] Revealed: the grubby tactics used by Santander to deny fraud refunds
Filed Under (Media, The Times) by admin

Ronnie - SantanderCompensation denied to customer who had £10,000 stolen from her account, after bank wrongly suggested that her fiancé was to blame

Santander, the Spanish banking giant, routinely suggests that fraud victims or their families are criminals in order to avoid refunding disputed transactions, an investigation by Times Money has found.

Emma Woolf, a longstanding customer of the bank, had £10,000 withdrawn from her account without her knowledge, but Santander, formerly known as Abbey, refused to refund the money and instead suggested that her fiancé, Jonathan Groman, had stolen the cash.
The bank relented and returned the money more than a year later only when the police arrested a Santander employee for fraud, after finding financial documents of customers in her home. But the bank agreed to pay back the cash only if Ms Woolf signed a confidentiality agreement. The bank also refused to apologise to Ms Woolf and Mr Groman.
This case, along with others that Times Money has seen, shows how victims of chip-and-PIN fraud often face an impossible battle to recover their money. The number of card fraud victims has leapt by 40 per cent in a year, to 2.4 million people, about one in 20 of the adult population, according to figures published this week.
Andy Bokor, of Trustwave, a company that compiles data on fraud at large companies, including banks, says: “About 5 per cent of our compromise investigations occur from internal threats.”
In some cases, victims are even left “owing” their bank money after fraudsters spend their overdraft or the balance of a fraudulent cheque before it has bounced.
Jilo Katter, a 23-year-old student from Coventry, has been locked in a “horrendous” dispute with Santander for 18 months after the bank held her liable for £14,000 spent by fraudsters on her account. Ms Katter’s problems began when her debit card was stolen. She reported the theft to Abbey two days later, during which time someone deposited a fraudulent cheque for £14,000 into her account and used her card and PIN to withdraw thousands of pounds from cash machines in shops. The cheque bounced a few days later, but by then the money had been spent and Ms Katter was held liable for the debt. “Abbey insists that the card used to withdraw the money was the ‘unique’ card still in my possession — there were two cards for my account and only one was stolen,” Ms Katter says. “Therefore the transactions must have been by me or someone connected to me who knew my PIN.”
The Emma Woolf case shows that fraudsters are able to clone chip-and-PIN cards. Yet, throughout Ms Woolf’s legal battle Santander insisted on the infallibility of chip-and-PIN.
In its defence of Ms Woolf’s compensation claim, Santander stated: “The genuine debit card was used for the withdrawals. This can be ascertained from the unique chip contained within the card . . . the unique chips are not capable of being copied.” But Ms Woolf says her card was in her safe at all times.
Ms Katter, like Ms Woolf, insists that she never wrote down her PIN or divulged it to anyone. She claims: “Santander suggested that the fraud may have been committed by someone close to me but it has not provided a scrap of evidence to substantiate this claim.”
She adds: “Santander has emptied my savings accounts of about £1,500 to repay some of the debt and is charging me £300 interest a month on the outstanding balance. It has ruined my credit rating and I am now being hounded by its debt collection agency.”
The police refused to help Ms Katter, saying that if Abbey has not reported the crime, no crime has been committed.
The Financial Ombudsman Service, the independent body that settles disputes between banks and consumers, also turned down her complaint, agreeing with Santander that she must have been negligent with her PIN.
The Ombudsman’s decision is “final and binding”, so Ms Katter’s only option is to take Santander to a small claims court, which can be expensive and time consuming. Ms Woolf, for example, spent about £3,000 on legal fees pursuing her case through the small claims court. Ms Katter says: “I am convinced that it is an inside job at Abbey, but how can I prove it? I am a student and there’s no way I can afford to take the bank to court.”
Experts say that legislation introduced in April 2007 compelling consumers to report fraud only to their bank and not to the police has allowed banks to treat victims unfairly.
Since 2007 it has been a bank’s responsibility, not the card holder’s, to pass details of the crime on to the police. This means that exasperated victims of fraud who go to the police for help areusually turned away.
Ms Woolf told police in Colindale, northwest London, of her fraud but was astonished to receive a letter saying that her case had been closed because Santander (then Abbey) would not co-operate with the investigation. “Our enquiries to date have centred around disclosure of relevant details from Abbey,” an Inspector wrote. “Unfortunately Abbey has not disclosed this information to us and we are therefore not in a position to continue the investigation.”
Critics say that the system of fraud reporting not only allows banks to pick and choose which cases are investigated, but also allows the Government to keep crime figures to a minimum as credit and debit card fraud does not appear in the annual British Crime Survey.
Ross Anderson, a professor of IT security at the University of Cambridge, says: “Inside jobs are a significant problem for banks. The Home Office pretends that card fraud is not a serious crime and tries to ignore the statistics in the hope it will go away. In fact it is getting worse and ordinary people are losing hundreds or even thousands of pounds to fraud.”
Victims of fraud can often see exactly where fraudsters have spent their money because it appears on their bank statement. Yet police will not identify the thieves by obtaining evidence such as CCTV footage of a cash machine or shop where a card was used fraudulently, unless requested to do so by a bank.
Ryah Snipe, 23, is being pursued by Santander for £7,000 after fraudsters drained her account using her card and PIN. The mother of one has been forced to hire a lawyer after the Financial Ombudsman Service turned down her complaint and the police refused to help.
Ms Snipe had her debit card stolen and a fraudulent cheque paid in to her account, which was spent before the money cleared. The fraudster’s spending spree left her with a debt of £7,000 that she must now repay.
Santander is charging interest on the debt and has hired a debt-collection agency to chase Ms Snipe for the money, she says. “I am not a criminal, I am a victim and a single mum who only earns £16,000 a year. I do not know how my PIN was obtained, I have never written it down or told the number to anyone. Santander has branded me a fraudster without any evidence, which affects my credit record and my future job prospects. My whole future is in question and I feel totally powerless.”
Times Money put a series of questions to Santander about how it deals with fraud but the bank refused to answer any of them (see box page 59).
A spokesman would say only: “We review every customer claim on an individual basis and take full responsibility for fraud that happens on our customers’ accounts, as long as we are satisfied that the customer has not done anything to leave their account vulnerable.
“However, we are unable to accept responsibility for money that goes missing from a customer’s account through their negligence.”
Case study
Ronnie Menassa, 29, set up the support site abbeyfraud.com in summer last year after he fell victim to fraud on his business account. Since then he has heard from about 40 other people fighting with Santander to recover their money.
“Some of the stories are horrendous, especially ones where people are chased by the bank for thousands of pounds spent by a fraudster. In all cases, dealing with Santander’s fraud department is a nightmare. Security at the bank definitely needs to be tightened — most importantly by not making funds available to fraudsters for uncleared ‘fake’ cheques.”
Numerous fraudulent direct debits and standing orders were set up on Mr Menassa’s account for everything from home rent, car insurance and mobile phone insurance to National Trust membership. Every time Mr Menassa, who runs yooneeq.com, a virtual telecoms and business support company, noticed a new fraudulent standing order or direct debit the bank would remove it, only for another to appear a few days later. “It went on for months,” Mr Menassa says.
A spokesman for Santander said: “We acted appropriately and closed the account when we became aware of the fraud and refunded the money to the customer. We reported the incident to the police.”
Unanswered questions
Times Money asked Santander the following questions, all of which the bank refused to answer:
• Will you issue an apology and compensation to Jonathan Groman for the way he was treated?
• Can you explain how it was possible for someone to obtain a copy of Emma Woolf’s card and PIN?
• What measures have you put in place to prevent similar fraud happening again?
• How does Santander justify suggesting that its customers (or their family) are criminals with only circumstantial evidence?
• Does Santander always investigate the possibility of employee fraud in disputed withdrawals? If not, why not?

Santander, the Spanish banking giant, routinely suggests that fraud victims or their families are criminals in order to avoid refunding disputed transactions, an investigation by Times Money has found.

Emma Woolf, a longstanding customer of the bank, had £10,000 withdrawn from her account without her knowledge, but Santander, formerly known as Abbey, refused to refund the money and instead suggested that her fiancé, Jonathan Groman, had stolen the cash.

The bank relented and returned the money more than a year later only when the police arrested a Santander employee for fraud, after finding financial documents of customers in her home. But the bank agreed to pay back the cash only if Ms Woolf signed a confidentiality agreement. The bank also refused to apologise to Ms Woolf and Mr Groman.

This case, along with others that Times Money has seen, shows how victims of chip-and-PIN fraud often face an impossible battle to recover their money. The number of card fraud victims has leapt by 40 per cent in a year, to 2.4 million people, about one in 20 of the adult population, according to figures published this week.

Andy Bokor, of Trustwave, a company that compiles data on fraud at large companies, including banks, says: “About 5 per cent of our compromise investigations occur from internal threats.”

In some cases, victims are even left “owing” their bank money after fraudsters spend their overdraft or the balance of a fraudulent cheque before it has bounced.

Jilo Katter, a 23-year-old student from Coventry, has been locked in a “horrendous” dispute with Santander for 18 months after the bank held her liable for £14,000 spent by fraudsters on her account. Ms Katter’s problems began when her debit card was stolen. She reported the theft to Abbey two days later, during which time someone deposited a fraudulent cheque for £14,000 into her account and used her card and PIN to withdraw thousands of pounds from cash machines in shops. The cheque bounced a few days later, but by then the money had been spent and Ms Katter was held liable for the debt. “Abbey insists that the card used to withdraw the money was the ‘unique’ card still in my possession — there were two cards for my account and only one was stolen,” Ms Katter says. “Therefore the transactions must have been by me or someone connected to me who knew my PIN.”

The Emma Woolf case shows that fraudsters are able to clone chip-and-PIN cards. Yet, throughout Ms Woolf’s legal battle Santander insisted on the infallibility of chip-and-PIN.

In its defence of Ms Woolf’s compensation claim, Santander stated: “The genuine debit card was used for the withdrawals. This can be ascertained from the unique chip contained within the card . . . the unique chips are not capable of being copied.” But Ms Woolf says her card was in her safe at all times.

Ms Katter, like Ms Woolf, insists that she never wrote down her PIN or divulged it to anyone. She claims: “Santander suggested that the fraud may have been committed by someone close to me but it has not provided a scrap of evidence to substantiate this claim.”

She adds: “Santander has emptied my savings accounts of about £1,500 to repay some of the debt and is charging me £300 interest a month on the outstanding balance. It has ruined my credit rating and I am now being hounded by its debt collection agency.”

The police refused to help Ms Katter, saying that if Abbey has not reported the crime, no crime has been committed.

The Financial Ombudsman Service, the independent body that settles disputes between banks and consumers, also turned down her complaint, agreeing with Santander that she must have been negligent with her PIN.

The Ombudsman’s decision is “final and binding”, so Ms Katter’s only option is to take Santander to a small claims court, which can be expensive and time consuming. Ms Woolf, for example, spent about £3,000 on legal fees pursuing her case through the small claims court. Ms Katter says: “I am convinced that it is an inside job at Abbey, but how can I prove it? I am a student and there’s no way I can afford to take the bank to court.”

Experts say that legislation introduced in April 2007 compelling consumers to report fraud only to their bank and not to the police has allowed banks to treat victims unfairly.

Since 2007 it has been a bank’s responsibility, not the card holder’s, to pass details of the crime on to the police. This means that exasperated victims of fraud who go to the police for help areusually turned away.

Ms Woolf told police in Colindale, northwest London, of her fraud but was astonished to receive a letter saying that her case had been closed because Santander (then Abbey) would not co-operate with the investigation. “Our enquiries to date have centred around disclosure of relevant details from Abbey,” an Inspector wrote. “Unfortunately Abbey has not disclosed this information to us and we are therefore not in a position to continue the investigation.”

Critics say that the system of fraud reporting not only allows banks to pick and choose which cases are investigated, but also allows the Government to keep crime figures to a minimum as credit and debit card fraud does not appear in the annual British Crime Survey.

Ross Anderson, a professor of IT security at the University of Cambridge, says: “Inside jobs are a significant problem for banks. The Home Office pretends that card fraud is not a serious crime and tries to ignore the statistics in the hope it will go away. In fact it is getting worse and ordinary people are losing hundreds or even thousands of pounds to fraud.”

Victims of fraud can often see exactly where fraudsters have spent their money because it appears on their bank statement. Yet police will not identify the thieves by obtaining evidence such as CCTV footage of a cash machine or shop where a card was used fraudulently, unless requested to do so by a bank.

Ryah Snipe, 23, is being pursued by Santander for £7,000 after fraudsters drained her account using her card and PIN. The mother of one has been forced to hire a lawyer after the Financial Ombudsman Service turned down her complaint and the police refused to help.

Ms Snipe had her debit card stolen and a fraudulent cheque paid in to her account, which was spent before the money cleared. The fraudster’s spending spree left her with a debt of £7,000 that she must now repay.

Santander is charging interest on the debt and has hired a debt-collection agency to chase Ms Snipe for the money, she says. “I am not a criminal, I am a victim and a single mum who only earns £16,000 a year. I do not know how my PIN was obtained, I have never written it down or told the number to anyone. Santander has branded me a fraudster without any evidence, which affects my credit record and my future job prospects. My whole future is in question and I feel totally powerless.”

Times Money put a series of questions to Santander about how it deals with fraud but the bank refused to answer any of them (see box page 59).

A spokesman would say only: “We review every customer claim on an individual basis and take full responsibility for fraud that happens on our customers’ accounts, as long as we are satisfied that the customer has not done anything to leave their account vulnerable.

“However, we are unable to accept responsibility for money that goes missing from a customer’s account through their negligence.”

Case study

Ronnie Menassa, 29, set up the support site abbeyfraud.com in summer last year after he fell victim to fraud on his business account. Since then he has heard from about 40 other people fighting with Santander to recover their money.

“Some of the stories are horrendous, especially ones where people are chased by the bank for thousands of pounds spent by a fraudster. In all cases, dealing with Santander’s fraud department is a nightmare. Security at the bank definitely needs to be tightened — most importantly by not making funds available to fraudsters for uncleared ‘fake’ cheques.”

Numerous fraudulent direct debits and standing orders were set up on Mr Menassa’s account for everything from home rent, car insurance and mobile phone insurance to National Trust membership. Every time Mr Menassa, who runs yooneeq.com, a virtual telecoms and business support company, noticed a new fraudulent standing order or direct debit the bank would remove it, only for another to appear a few days later. “It went on for months,” Mr Menassa says.

A spokesman for Santander said: “We acted appropriately and closed the account when we became aware of the fraud and refunded the money to the customer. We reported the incident to the police.”

Unanswered questions

Times Money asked Santander the following questions, all of which the bank refused to answer:

• Will you issue an apology and compensation to Jonathan Groman for the way he was treated?

• Can you explain how it was possible for someone to obtain a copy of Emma Woolf’s card and PIN?

• What measures have you put in place to prevent similar fraud happening again?

• How does Santander justify suggesting that its customers (or their family) are criminals with only circumstantial evidence?

• Does Santander always investigate the possibility of employee fraud in disputed withdrawals? If not, why not?

Source: The Times Online – http://yoorl.info/?Jp

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