Tuesday, April 07, 2009

Clydesdale Bank faces legal challenge over refusal to disclose information on fraud case

The Clydesdale Bank is facing a legal challenge over its decision not to hand over information relating to a fraud which was committed against one of its customers (odd, you would have thought the customer had a right to know – Ed)

The Herald reports :

Fraud victim mounts legal challenge against bank

LUCY ADAMS, Chief Reporter April 06 2009

A legal challenge is to be mounted against one of Scotland's leading banks after it refused to hand over information about a fraud committed against a customer.

Gilbert Wright, 87, went to a cash machine in the main street of Cambuslang, North Lanarkshire, last New Year's Eve, and discovered that £8500 had been taken out of his Clydesdale Bank account.

The money was refunded by the bank after a delay, but it has refused to pass on the details of how it happened, claiming it cannot because of the Data Protection Act.

Lawyer Cameron Fyfe is now looking to launch a legal case against the Clydesdale for refusing to hand over details. He said: "If neither the bank nor the police are prepared to expose voluntarily the identity of the fraudster, we will seek to obtain a court order for it. If someone were hit over the head with a brick, they would be treated as a victim and yet in this case, they are not."

Experts say bank and credit card fraud is a growing problem as a result of the global financial crisis and yet consumer groups say too little is being done to protect customers and advise them.

Identity theft is estimated to cost the UK economy £1.7bn, and affects more than 100,000 people every year.

Gail Reid, Mr Wright's daughter, said: "My father was very badly shaken. We couldn't understand how it could have happened as he doesn't even use telephone banking. They said there were 11 calls made and that when the person calling had tried to move £11,000 to another bank account, they had advised him to split it and move it in two different transactions.

"I said I wanted the police to look into it but the (bank) said no and that they would reimburse my dad and call the police themselves. We were assured the money would be back in within five working days but nothing happened. I kept calling them.

"My dad was so upset. This was his life savings. It was only after I involved the lawyer that they finally agreed to repay the money. There was no apology though. The whole thing was deplorable.

"We want to know who took the money. My dad is concerned that it could be someone he knows. We went to the police and they said it was up to the bank, but the bank said that under data protection they couldn't give my dad any of the details."

Pamela Cameron, Mr Wright's grand-daughter, said: "If someone has fraudulently tried to access your account, the first thing you want to find out is who they are and how they were able to do that.

"The way he has been treated throughout seems unbelievable."
A spokesman for Clydesdale Bank said: "We take the issue of fraud very seriously and employ sophisticated fraud detection and management systems.

"If fraud occurs, extensive investigations are undertaken to seek a criminal conviction. Although these investigations take place we do not share specific details of fraudulent activity."

Consumer rights groups have warned that as the financial crisis hits profits, the banking industry is becoming increasingly reluctant to compensate customers who have lost money through fraud.

Trisha McAuley, head of services at Consumer Focus Scotland, said: "The current economic situation means this problem is just going to get worse. This case really resonates with the concerns people bring to us.

"The key issue is that the bank is seen as the victim and no support is given to consumers. It is a huge problem and the customers are repeatedly left to pick up the pieces themselves without any help. If their identity has been stolen, they get no control over the information and no way to stop it happening again.

"We believe banks should have somewhere that customers can go to get help. We would like to see a national centre dedicated to this."

The Financial Ombudsman Service, which handles consumer complaints against banks, now deals with about 125 cases a month of customers locked in disputes over PIN fraud. Most of these involve withdrawals from cash machines, where the consumer denies either making the transaction or authorising someone else to do so.

Under the Banking Code, to which all banks must adhere, customers are responsible for losses only if they acted "without reasonable care". This could include writing down a PIN or allowing someone else to use a card.

The code clearly states that unless a bank can prove that its customer acted fraudulently or without reasonable care, the most that the customer will be liable for is £50.

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