If criminal proceedings are taken and there is a successful conviction, then the Court can award compensation. However, it can sometimes be difficult to trace the fraudster, particularly if they are abroad, or they may no longer have any assets with which to pay any compensation.
Many victims are unaware that the banks from where the payments to the scammer are made, have a duty to apply due diligence when looking after their customers’ accounts. As well as having robust security checks and data protection measures, the banks should have processes in place to highlight and act on any ‘red flags’ such as vulnerable customers, regular and high-value payment transfers, or other unusual or out of character transactions activity.
Where there is a dispute between a bank and a customer who has lost out to a scam, then a complaint can be made to the Financial Ombudsman Service (FOS). FOS will examine the circumstances of the scam and the bank’s response. FOS will take into account that banks will be more familiar with the types of fraud than the customer, so should do what they can to protect them including stopping suspicious transfers, freezing accounts or collaborating with other banks.
There has been a range of recent FOS decisions supporting customers who have been the victims of these scams, with some receiving substantial compensation. Some examples can be found here: