IS OPENING AN ACCOUNT AT BARCLAYS A PASSPORT FOR INTERNATIONAL CROOKS?

Barclays is being used by international fraudsters to rip off victims both at home and abroad yet it takes no action, according to a campaign group. Barclays Bank has been accused by victims of fraud of loose security procedures which have enabled international crooks to open accounts with foreign passports and then use them to fleece individuals online. The bank vigorously rejects the claims, saying it takes account security very seriously, carries out in-depth verification checks and meets all ID requirements under money-laundering rules. But an action group set up following a multimillion pound fraud against holidaymakers who booked villas and homes through the Owners Direct/HomeAway website, allege that the bank is being used by crooks in nine out of 10 cases it has seen. The holiday villa fraud reported extensively in Guardian Money in recent weeks sees holidaymakers paying what they believe to be the villa owner for their rental by bank transfer. In fact, the owner’s email address has been taken over by fraudsters who need a bank account to accept the money.

The group claims:

• Fraudsters from around the world are heading to the UK to open Barclays current accounts using foreign passports as ID. Other banks, such as Lloyds and Halifax, operate a list of countries mostly EU and other developed countries whose passports they accept, but which excludes many east European, African and Asian countries.
• Web chats with Barclays staff, where the victims posed as potential account openers, reveal that the bank encourages applications with relatively little ID, such as a foreign driving licence.
• Chasing the crooks is made difficult as they may leave Britain as soon as they have obtained the account. Once opened, it can be operated from anywhere in the world.

Barclays points out that it requires account openers to show proof of residence in the UK, such as a recent gas, water or telephone bill. But the campaigners allege that these are relatively easy to forge. The allegations come amid growing concern over the scale of financial crime. Last month, it emerged that £4m bank frauds are currently being left out of the official UK crime figures. If bank and credit card fraud were included in the annual Crime Survey for England and Wales, the estimated number of offences would jump by 50% taking the total from £7.3m to £11m a year, according to the Office for National Statistics, and puncturing the widely reported story that crime has fallen.

The allegations against Barclays have been made by Vacation Rental Scam Victims, set up by villa owners in Bali, Indonesia. They were fed up with holidaymakers arriving at their properties believing they had rented the home, only to find that they had been scammed. The group says that of the 101 victims they are aware of, 93 paid money to fraudsters using Barclays accounts. Importantly, the victims are not necessarily British. Campaigners say that the villa owner might be Australian, and the holidaymaker from New Zealand, but the account they are told to pay money into is nearly always Barclays in the UK. Could it be that there is a Mr. Big behind this particular fraud, who just happens to have used Barclays? The victims point out that the fraud requires opening hundreds of Barclays accounts. Reports in Australia allege that fraudsters switched to Barclays after Lloyds tightened up account opening rules. The campaign group is not alone in contacting Guardian Money with these allegations. An Indian businessman in Mumbai alleges rules “were flouted” when a fraudster opened two Barclays accounts in Leicester in his company’s name. He says his email account was hijacked and customers in Germany, the US and Canada made payments into the accounts, even though he has no connection with the UK. The villa owners’ campaign group says it has warned Barclays over many years that it is being used by fraudsters, but that it has not had an adequate response. It is also critical of the UK police’s response, and says reporting crimes to Action Fraud has been “a waste of time”. The Barclays website confirms that a foreign passport or driving licence can be used as ID to open a bank account, even though the documents may not be in English. In a web chat that took place last month, a Barclays employee told a member of the campaign group that she could apply for a Cash Card account and it would take “15-20 minutes in branch”. Once opened, it could be used immediately. When she asked how her documents could possibly be verified by branch staff, as they are written in Indonesian, she was told: “We have interpreters in the branch who read foreign documents, so this will not be a problem.” Barclays says that it does not open accounts for foreign nationals who are based overseas, except for very wealthy clients. Its website states that it will accept a letter or bill from a utility company as proof of a UK address, as long as it is less than three months old. Stephen Howes, a victim of the Owners Direct scam, who lives in central London, says he was amazed when he looked into the matter after losing £2,000. He made a bank transfer into a Barclays account, thinking he was paying for a villa in Italy last May. When he learned that he, and most of the other victims, had also paid their money into Barclays accounts, he decided he would take the matter up with the authorities. He claims Barclays denied all liability.

Action Fraud, he says, took the details but has told him nothing since. He says he’s been told by another victim that the Financial Ombudsman will not rule on whether the banks have failed to protect consumers’ interests in such circumstances, as it is “not in its remit”. “It’s bizarre. Millions of pounds that have been stolen from victims all around the world have been paid into accounts of one UK bank, and yet no one wants to take any action, or has shown any interest in even taking a look at it. To me it seems incredible,” says Howes. His MP, Mark Field, took up his case, and told Money that he has “been in correspondence with the police, government and a particular bank, to try to get additional safeguards put in place”. A spokeswoman for the campaign group similarly describes how the group has failed to get the bank or the police to take up the matter even after posing as renters and catching the fraudsters in the act of defrauding their next victim. “We have been campaigning to get the UK authorities and Barclays in particular, to take this seriously. We have sent them details of accounts being used but no one wants to tackle the matter it’s all being swept under the carpet,” she says. A spokeswoman for the bank says: “Barclays takes any scam issues very seriously. We want to eliminate the use of accounts for scams and appreciate any information provided to us to assist with this.” She said the bank does not accept the allegation that all Barclays accounts used for fraudulent purposes are opened using counterfeit identification. “Sample tests have shown that the majority of Barclays accounts used in scams are opened with genuine ID. We have robust identity and verification processes, complying with all regulatory requirements.” She added that HM Treasury approved industry guidance stipulates that a government-issued document such as a valid passport or national identity card is an acceptable and independent means of verifying a customer’s identity, provided that it contains the full name and photograph, and confirms either the customer’s date of birth or address. “Both the passport and the second supporting document have to be in the name of the individual. The second document has to state the UK address given as being the current address, and has to be less than three months old, not printed from the internet, not a final or closing statement etc. “The overall application is also subject to fraud screening via internal and external databases.”

Culled from Guardian