Retired detective lost life savings in a ‘clone firm’ investment scam

The fraudsters seemed highly professional and convincing, but Santander still said no to a refund

My husband and I have lost our life savings to a very professional investment scammer. We both received lump sums on retirement from the fire service and the police which we normally invest in bonds, changing every year. This year, when we were comparing interest rates, a relative recommended Vanguard. We Googled the website, emailed for information, and received a prompt response which included a brochure detailing a fixed-interest high-yield bond at 2.12%.

It stated that the company was the Which? recommended provider for investment platforms in 2019/20. The company number and address provided on all the documents were the same as those registered for Vanguard at Companies House. We decided to invest £20,000 each, and were asked to complete anti-money laundering forms and ID checks. We were appointed a named asset manager, sent bond certificates, and given a sign-in to our online portals with the FTSE running on screen where we could view our investments.

After discussions with our asset manager, we both invested a further £205,000. I’d asked about financial protection and been reassured, in a detailed letter, about the FSCS and first charge legal protection.

We discovered we’d been scammed when my husband’s most recent payment failed to appear on our online portal. He called our asset manager, who put the transaction up immediately. This seemed odd, so I Googled Vanguard’s customer service, and was told, on calling, that they had no record of us. We immediately notified our bank, Santander, who froze our accounts and reported it to Action Fraud.

Soon the line to our asset manager was dead, and the online portal had vanished. I was reassured that Santander had introduced a refund scheme for victims tricked into paying scammers, but it has refused more than £20,000 and, nearly two months on, we’ve heard no more from Action Fraud.
LS, Norfolk

Why, one may ask, should a bank be left to pick up the tab when customers transfer money to fraudsters? The answer is the Contingent Reimbursement Model (CRM) code which most major banks are signed up to, and which promises refunds to scammed customers provided they were not unduly negligent.

The aim is to incentivise banks to do more to protect customers as fraud becomes increasingly prolific and sophisticated. The financial sector is familiar with scams and how they operate; the public, by and large, is not. You are a retired detective and were taken in.

I have taken a look at the correspondence sent to you by the fraudsters and, frankly, I wouldn’t have twigged either. The company logo, address and number match those of the real Vanguard, and the layout and tone of the letters and certificates are convincing. Moreover, unlike other victims whose money vanishes as soon as they transfer, you were able to see your “investments” online for four days. One clue was that the brochure said bonds were only available at the advertised interest rates for another 24 hours. Scammers always try to rush victims into shelling out.

Santander wouldn’t have realised how plausible the documents were, because it never asked to see them. It simply decided you didn’t do due diligence. In fact, you had checked on the Companies House register. By ill fortune, when you had initially Googled Vanguard, you had landed on a cloned website. The Financial Conduct Authority has included this in its warning list of unauthorised companies.

Santander says it had asked if you had checked this list when you set up a payment, but you don’t recall the question and, because Vanguard had been recommended and proactively sought out by you, you had no reason for suspicion. According to the Lending Standards Board, which supervises the CRM, banks must take into account that some scams are so convincing even an experienced customer could not spot them. I believe this applies to you and that, given the circumstances, Santander cannot dismiss your claim on the grounds of negligence.

After I sent the bank the correspondence, it decided to reverse its decision and pay up. “We warned the customers about the dangers of scams and the importance of checking the FCA register, which they confirmed they had checked,” it says. “Having reviewed the individual circumstances we’ve fully refunded £225,000.” (It had previously refunded £20,000).

The real Vanguard told me that it was aware of a number of attempts to impersonate it and that it reports all scams to the regulators. Action Fraud said it was investigating.

Your case is unusual because you made the initial contact. It highlights the fact that no website, text, phone call or product should be taken at face value, however plausible. Don’t commit to anything without investigating and always check the FCA warning list.

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Anna Tims

The GuardianTramp

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