Banks need stricter controls to prevent romance fraud, says City regulator
The City regulator has called on banks and payment firms to bring in stricter controls protecting customers from romance fraud after a study showed a number of missed “red flags” that led to people losing huge sums of money,The review by the Financial Conduct Authority (FCA) highlighted one case where someone lost £428,000, another where a customer made 403 payments totalling £72,000 to a fraudster and a case where someone wanted money to transfer cryptocurrency to their “partner” in Iraq,Romance scams, where criminals try to build emotional connections with victims before defrauding them, have been growing in scale and complexity in recent years,Figures from the City of London police put the loss from romance fraud at £106m last year, although the FCA says the real figure is much higher as many people do not report the crime owing to feelings of shame and stigma,The FCA review of six banks and payment firms looked at how they detect and prevent romance fraud and found large disparities in how victims of fraud were treated.
“Despite examples of good practice, there were multiple instances of firms missing opportunities to identify seemingly suspicious transactions,” it said.The study found 60 fraud cases, ranging from £100 to £428,249.Most of the scams (85%) emerged from relationships built by the fraudsters on social media and dating sites.In one case, a firm failed to identify fraud when six payments totalling more than £131,000 were sent overseas.In almost half of the cases, the victims did not give the real reason for payments.
In another fraud that went through, a victim made 15 international payments, worth £190,000, and claimed to be buying international property.But the staff handling the transactions did not seek documentation or question the use of multiple accounts in different names, said the report.The FCA report said some firms did not properly safeguard victims after the fraud emerged, even though there were clear signs they were vulnerable.“For example, one victim expressed suicidal thoughts and another received threats of violence from the fraudster,” it said.The watchdog said banks and payment providers could bring in measures to better protect customers, including improved monitoring systems, better training for staff and providing compassionate aftercare.
Steve Smart, the FCA’s joint executive director of enforcement and market oversight, described romance fraud as a “vicious crime”, adding: “All too often it is the vulnerable that fall victim,The impact – financially and personally – can be devastating,”Fraudsters typically try to identify people who are lonely or isolated,They often claim to be working abroad, and are therefore unable to meet, and say they need money to fund a medical emergency,Santander has said it has seen almost £5.
5m stolen through romance frauds since the start of the year.Michelle Pilsworth, the bank’s head of fraud, said the criminals increasingly ask for gift cards from victims.The consumer group Which? said banks and payment operators that fail to protect customers should have action taken against them.
Gaucho chain to slash waiters’ share of service charge and boost head office pay
The Argentinian steak restaurant Gaucho is slashing the share of the service charge its waiters receive, using some of the funds to bump up the pay package of head office workers.A letter to workers seen by the Guardian says that from 1 October existing waiters would receive between 25.45% and 29.4% of the service charge collected at tables they have served, depending on length of service, down from 37% previously – already a reduction from 45% early last year. Bar staff will get 17% of the service charge, down from 20%
Global markets fall and gold hits record high amid jitters over US banks
Global stock markets fell sharply and gold hit a record high after two US regional banks said they had been exposed to millions of dollars of bad loans and alleged fraud.Signs of credit stress rattled markets across Europe and Asia. In London the FTSE 100 fell 1.5%, Germany’s Dax fell 2%, the Ibex in Spain was off 0.8% and France’s Cac 40 dropped 1
‘Finances are getting tighter’: US car repossessions surge as more Americans default on auto loans
Alarm bells are ringing on Wall Street. The recent collapses of Tricolor, a used car seller and sub-prime auto lender, and First Brands, an auto parts supplier, have put the finance industry on edge, almost two decades after problems in the sub-prime mortgage lending market set the stage for the global financial crisis.“When you see one cockroach, there are probably more,” Jamie Dimon, the JPMorgan Chase CEO, ominously cautioned analysts this week, after the US’s largest bank disclosed a $170m charge tied to Tricolor’s bankruptcy. “Everyone should be forewarned on this one.”As the car lending market shows signs of strain, business around repossessions is booming
Ferrari cuts number of cars it sends to UK after non-dom tax status scrapped
Ferrari has cut the number of cars it sells in the UK as wealthy individuals relocate overseas after tax changes and the abolition of non-dom status.The Italian luxury carmaker reportedly began limiting the number of vehicles it exported to the UK about six months ago, in an attempt to stop a decline in their residual value.Benedetto Vigna, the chief executive of the carmaker, said that Ferrari had seen a “stabilisation” in sales after its decision to reduce the number of vehicles it allocated to the UK.“Some people are getting out of that country for tax reasons,” he told the Financial Times, adding that taxes were not the only reason for the fall in residual values. “There are many different factors
The ‘messy’ trend behind Australia’s rising unemployment is worrying economists
As Jim Chalmers moves among the global elite during the G20 talkfest with fellow finance ministers and big-time investors in Washington this week, he will be spruiking Australia’s enviable economic performance over recent years.A particular point of pride has been the strength of the labour market.Not only has unemployment stayed low, the increase in the share of working-age Australians with a job has climbed by 3.1 percentage points since immediately before the pandemic.That increase is twice the OECD average, and compares with zero growth in the US and New Zealand
Australia Post incorrectly charged tariffs on items ordered online being returned to the US
Australia Post incorrectly collected tariffs from customers returning items to the US after retail parcel services to the country resumed last week, the government-owned postal service has admitted.Australia Post said it had identified an error with a third-party provider where “a number of customers” were incorrectly charged a tariff for postal returns of US-manufactured items, which should not be subject to import duties.“The error was quickly fixed, and we are reaching out to impacted customers,” a spokesperson said in a statement. They will receive a refund.Parcel services were halted in August when the US suspended the “de minimis” exemption, which allowed parcels worth less than US$800 to enter the country duty-free
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