How to Track Down a Fraudster

How to Track Down a Fraudster

Posted by Anis Waiz, on May 14, 2021. Tags:

Our previous article on authorised push payments (APP), shone a light on the prevalence of APP fraud, the code that the government has launched to try and assist victims and the case law on liability of a victim’s bank when these APP frauds takes place.

This article proposes to deal with the practicalities of what happens next for victims of APP fraud.

The fraud is discovered

Upon the victim notifying his/her bank that they may have been defrauded into making a push payment to a fraudster, the bank is on notice and is obliged to react quickly to try and protect its customer by (1) stopping the money from leaving the victim’s account, if it hasn’t already (2) notifying the receiving bank of the possible fraud and asking for those funds to be held (rather than allowing the fraudster to withdraw or spend the funds). Often, this is not enough, the fraudsters will react quickly upon receipt of funds and ensure that the funds are moved on to another account before the fraud is uncovered.

What are your options?

As a result of the APP Contingent Reimbursement Model Voluntary Code (May 2019), mentioned in the previous article linked above, victims can seek redress from their bank even where the bank has been unable to stop the payment or recover funds from the fraudsters account. However, redress under the Code is not always granted and the victim might be in a position where it looks to seek a possible claim against the fraudster.

The difficulty comes when the victim requests information regarding the fraudster’s account from the bank. Even with fraudsters, banks owe a duty of confidentiality and are unable to disclose any information about another customer. That is, unless, the victim is able to obtain a Court Order.

Norwich Pharmacal Order

A victim is able to request that the Court orders that the bank discloses the information it holds regarding the fraudster, giving the victim enough details to compose a claim against the fraudster. The Order that the court will make in those circumstances is a Norwich Pharmacal Order (NPO) which is only usually available when the respondent being asked to disclose the information, in this case, the bank, is innocently mixed up in the wrongdoing, rather than being a party to the fraud itself.

To get started with such a claim, the Part 8 Civil Procedure Rules can be followed with a Part 8 claim form completed and filed with the Court along with a witness statement and draft order setting out the disclosure required.

It is often possible, in advance of starting the Court process, to agree the scope of the disclosure with the bank (or its solicitors) which, if the terms of the Order are acceptable to it, will take a neutral position and not oppose the victim’s request for an NPO from the Court.

How can we assist?

Our Banking and Finance team have experience of dealing with complex fraud cases and can provide specialist advice on APP frauds and claims arising from mortgage fraud.

Anis Waiz is an Associate Solicitor in Spratt Endicott’s Dispute Resolution practice, specialising in banking and finance litigation. Contact Anis on awaiz@se-law.co.uk

*Disclaimer: While everything has been done to ensure the accuracy of the contents of this article, it is a general guide only. It is not comprehensive and does not constitute legal advice. Specific legal advice should be sought in relation to the particular facts of a given situation. This article is accurate at time of publication on 11 May 2021.

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