High street bank TSB says it has reimbursed 98% of customers who fell victim to fraud so far this year.
Clive and Judith Morgans are among the other 2%.
Clive wanted a safe haven for his savings and an online search led him to what he thought was the private bank Kleinwort Hambros.
In fact it was a clone of the London-based bank set up by criminals, who carefully reeled him in.
“They groomed my husband over a period of months and the result was that we invested the whole of his lump sum retirement pension of £100,000 into what we believed was a one year fixed-term bond,” said his wife Judith.
A couple of months later the phone number and email address that Clive had been using to contact the supposed Kleinwort Hambros investment adviser stopped working.
When the sickening realisation dawned on him that his savings had vanished he contacted TSB, stunned that it had not stepped in with some advice before a customer of 40 years made such uncharacteristic and large money transfers.
The bank admitted that it never gave Clive any fraud alerts, and gave the justification that he was an experienced investor. It told him: “You have dealt previously with investments and have a financial adviser.”
Both these assertions are untrue, says Clive, who is a retired customer services manager for a cardboard box manufacturer in Blackwood, Gwent.
He complained to the Financial Ombudsman Service, whose investigating officer ruled that, far from being an experienced investor, Clive had previously made withdrawals of no more than £300. The investigator said TSB should have noticed that the large transfers put him at risk, and explained the dangers of clone banks.
"These transactions were high-level, sudden payments and as such should’ve raised concern with TSB," the investigator ruled. "I would’ve expected them to have contacted Mr Morgans to ask questions about the payment and discussed the risk of fraud and scams. Had this happened, I think it’s more likely than not that Mr Morgans would’ve re-considered making the transaction.
“I think that would’ve made a difference here and prevented the scam.”
The investigator also picked up on an oddity of the case. Clive had tried to make the payment to the fake Kleinwort Hambros in a single transfer. This was blocked because it exceeded his transfer limit. However the block was then removed and TSB marked the transfer as "genuine" without contacting Mr Morgans. He then went ahead in transferring the £100,000 in five separate payments over five days.
TSB was told to refund the couple.
Judith said they were "relieved and overjoyed", but their joy was short-lived.
TSB appealed and an Ombudsman manager overturned the earlier ruling.
The manager agreed that Clive was not an experienced investor and said: “I do think TSB ought to have intervened”.
But, remarkably, he decided that Clive would have still transferred the money even if he had been given a fraud warning because the sophisticated nature of the scam meant he was convinced that he was dealing with the genuine Kleinwort Hambros.
This, says Clive, is a “subjective belief not grounded in any evidence”.
“The amount we were investing represented 28 years of my working life so if the bank had contacted me it would have made me question myself,” he said.
“I would have definitely as a minimum have put a hold on the payment so that I could talk to Judith about it.
“I have no doubt that we would have looked on the internet for an alternative number for Kleinwort Hambros to check all was OK.
“This would obviously have resulted in us stopping the payments to the scammers.”
In July I wrote an article about another bank clone fraud, this time the cloned bank was Goldman Sachs, the customer's bank was Santander and, coincidentally, the amount lost was also £100,000. Santander had refused a refund but I was able to help steer the poor victim to the Financial Ombudsman, which told the bank to change its mind.
Judith and Clive read that article and so contacted me, hoping I might be able to help with their case. I tried, to no avail.
TSB is not budging, and told me: “The Financial Ombudsman Service considered the case in detail and did not uphold the complaint against TSB.”
The Ombudsman said it would not comment on individual cases.
Instead it sent me a general statement, which said: “We will examine the evidence and individual merits of each case and decide on balance what a fair and reasonable outcome would be in all the circumstances.”
“We will never understand why what appeared to us to be a properly made decision by the first investigating officer was overturned," said Judith.
“We have always had hope that TSB or the Ombudsman would review the decision but those hopes have been dashed.
“Thank you so much for your efforts, it does help to think that there are people who care.”
It was not just their bank and the Ombudsman who Clive and Judith felt let down by, it was the police too.
Greater Manchester Police said it was “at the forefront of an investigation into a complex investment fraud with a large amount of victims spread nationally throughout the UK”.
The letter to the couple warned that the chances of recovering any money was “incredibly low” as it was invariably transferred abroad in these types of fraud.
There had been some arrests, but these suspects were “low level operators whose accounts have been used in order to facilitate the fraud” and there was little chance of any significant convictions.
The letter explained that after 18 months: “It is with great regret and a large level of frustration that Greater Manchester Police has had to make the strategic decision to cease any further investigation into this series of offences.”
Judith responded: “So many brick walls.”
A warning about Kleinwort Hambros clones was posted on the website of the Financial Services Authority eight months after Clive was defrauded, you can read it here.
Kleinwort Hambros also carries a fraud warning here.
investigate@mirror.co.uk
