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Dear Which?,
Our son was away at university when a letter arrived at our home, addressed to him, from Nationwide.
It revealed that he had taken out a loan for £10,000 and that he was two months in arrears.
After a tearful conversation he explained that he had been scammed, and that he was feeling suicidal.
The money was paid to his Santander current account, which he then sent to the fraudster's account. What can we do?
Nuala Webb, St Albans
Put to rights
Mike Croxford, Which? Money Helpline adviser, says:
Your son's terrible experience is a reminder of the serious impact that fraud can have, and it raises questions over banks' effectiveness in preventing fraud.
Your son, like a lot of students, got into some financial difficulty in their first term away.
He was approached on Snapchat by a fraudster who said they could help, through a bitcoin trading scheme. The fraudster was able to get enough personal details from your son to apply for a loan in his name.
With threats of violence, the fraudster got your son to transfer £8,400, followed by a further £1,000 the same day, and pressured him not to talk to Santander despite the bank's attempts to contact him.
Two types of frauds were involved here: authorised push payment fraud, where you son was tricked into transferring money, and identity fraud, where the fraudster applied for a loan in your son's name.
'Earning £1,400 a month with no outgoings'
That Nationwide was willing to lend to your son is deeply concerning. The fraudster claimed your son was a Lloyds Bank employee earning £1,400 a month with no outgoings.
Neither a check of your son's credit report nor his personal details would necessarily have revealed this to be false, but you'd hope a 19-year-old attempting to borrow £10,000 – not to mention the curious lack of outgoings – would prompt extra checks.
Nationwide said: 'We sympathise with our member who's been the vitcim of scam', pointing out that while your son wasn't aware of the initial loan application, he did sign and return the credit agreement.
After Santander refunded the £10,000 to Nationwide, Nationwide agreed to write off the interest on the loan and remove it from your son's credit file.
You told us you remain worried that other young people could fall victim to these scams and might struggle to talk to friends or parents.
Need to know
- Most banks are signed up to the Authorised Push Payment (APP) Scam Code. This requires them to provide effective warnings to customers, act quickly when a scam is reported and reimburse customers who aren’t to blame.
- If you fall victim to APP fraud, you should contact your bank first, then the Financial Ombudsman Service if you're unhappy with the outcome.
- If your identity has been stolen, you should contact your bank and the local police on the non-emergency phone number, 101, as soon as possible. You can also report the fraud via Action Fraud, the police’s fraud-reporting service.
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source https://www.which.co.uk/news/article/my-19-year-old-son-was-tricked-into-taking-out-a-10000-loan-what-can-i-do-aXzw75c8bUc7