A MAJOR review is being conducted by the nation’s biggest banks and building societies after rogue traders exploited financial loopholes to raid the accounts of victims in multi-million pound scams.
The changing face of the finance sector, with an increasing reliance on internet banking, has opened up new avenues for fraudsters to exploit as they attempt to secrete huge sums of money from elderly victims into their own accounts.
While banks liaised with trading standards officers to introduce policies and training a decade ago to help staff identify rogue traders, concerns are mounting that offenders are using increasingly sophisticated scams to evade detection.
The Yorkshire Post has learnt a new protocol is to be published later this year following the review which is involving 24 of the country’s largest financial organisations, including Lloyds Bank, Nationwide and York-based Aviva. Research by the Alzheimer’s Society has revealed nearly two-thirds – 62 per cent – of carers confirmed the person they look after had been approached by unsolicited or unscrupulous cold callers or salespeople.
The charity’s area manager for Yorkshire and the Humber, Judith Gregory, said: “Currently there are too many loopholes and problems in the systems which should be protecting individuals from financial abuse.
“In particular, the services offered by banks and other providers are not meeting the needs of people with dementia and carers. Those who support people with dementia need greater understanding of financial abuse, so they can spot the signs or prevent it happening.
“But apart from financial institutions putting better safeguards in place, we would also encourage people who know that they have someone nearby who has dementia to be a ‘good neighbour’ and keep an eye on them.
“Should they be suspicious of any callers that they notice visiting the individual we would encourage them to report their concerns to the police or their local trading standards team.”
While rogue traders have turned to internet banking to plunder victims’ accounts, they have also employed more traditional methods to secure huge sums of money.
An investigation by trading standards officers in North Yorkshire unearthed a fraud in which an 88-year-old widower from Haxby in York had been targeted. Multiple cheques in excess of £72,000 were deposited into offenders’ accounts, although there was no evidence of any building or gardening work being carried out at the victim’s home.
The Alzheimer’s Society admitted there is still a taboo about discussing financial matters, which means many frauds remain undetected.
The charity also stressed it is often difficult to prove financial abuse has occurred – especially if the victim is suffering from dementia and cannot provide sufficient details about the offences.
The British Banking Association (BBA), which represents more than 200 financial organisations, maintained every effort is being made to tackle rogue traders and ensure frauds are uncovered at the earliest stage.
The BBA has forged close links with trading standards units and police forces nationally as well as charities including the Alzheimer’s Society to share best practice and review existing arrangements. The existing protocol sets out procedures to spot unusual transactions and for staff to contact the customer to seek permission to inform a relative or a law enforcement agency.
A BBA spokesman said: “Sadly, older and vulnerable people are often the target of scams and rogue workmen. Recognising suspicious circumstances and knowing how to handle them, including reinforcing knowledge of the protocol, comes high up the banks’ regular training agenda, but ultimately if the customer insists that the transaction is carried out, the bank may be unable to prevent it taking place.”
Dementia is one of the most pressing issues facing the NHS, and the Government has pledged to double funding to £66m by 2015 for research into the disease. Prime Minister David Cameron has admitted it is a “scandal” more has not been done to address dementia, which is estimated to cost the UK £23bn.
Anyone wishing to report incidents can contact the Citizens Advice consumer helpline on 08454 040506.