A massive leak of one million audio files from scam call centers in Georgia has exposed the ruthless methods used to trick victims into fraudulent cryptocurrency investments. The scheme, a type of authorised push payment (APP) fraud, involves deceiving individuals into voluntarily transferring funds from their bank accounts.
The Scale of Investment Fraud
Investment scams are a growing financial threat. Data from UK Finance reveals that scammers stole £56 million from Britons in the first half of 2024. Fraudsters lure victims with fake investment opportunities, including cryptocurrencies, gold, and property. Many cases go unreported, including the £9 million lost by victims of the Georgian scheme.
While purchase scams are more common, investment fraud causes far greater financial losses. Despite accounting for only 4% of APP fraud cases, investment scams made up 25% of the total £214 million stolen in the first half of the year.
New Protections for APP Fraud Victims
Until late 2023, APP fraud victims faced uncertainty about reimbursement. However, in October 2024, the Payment Systems Regulator (PSR) introduced new rules requiring banks to refund victims up to £85,000. Initially, the cap was expected to be £415,000, but regulators lowered it despite concerns over victims losing life savings and pensions.
Under the new system:
- 99% of APP fraud cases fall within the cap.
- 90% of stolen funds will be reimbursed.
- Victims can expect refunds within five business days.
Previously, refunds were inconsistent. Some banks refunded 96% of cases, while others reimbursed only 3%. The new rules make it mandatory for banks and payment firms to share the burden 50:50 between the sending and receiving institution.
Who Qualifies for a Refund?
The refund rules apply to domestic transfers made via Faster Payments or Chaps. However, they do not cover international transactions, including those linked to the Georgian scam. Even so, victims should still contact their banks to request reimbursement.
Victims must report fraud within 13 months of discovering it. While banks must process claims within 35 business days, they can pause the timeline for further investigation. A £100 excess may apply, but it does not apply to vulnerable consumers.
Refunds may be denied if a victim is found complicit or grossly negligent, but the regulator clarifies that gross negligence is a high bar and does not apply to vulnerable individuals.
What If a Victim Loses More Than £85,000?
For losses above £85,000, victims can:
- Appeal directly to their bank, which may choose to reimburse more.
- File a complaint with the Financial Ombudsman Service (FOS), which can order compensation up to £430,000.
The Georgia scam victims were targeted before the new rules came into effect. However, they should still report the fraud to their banks, as some institutions may apply the old voluntary code to assess their claims fairly.
A Growing Threat
The Georgia leak sheds light on the increasing sophistication of investment fraud, emphasizing the need for stronger global protections. As scammers continue refining their tactics, regulators and financial institutions must work harder to safeguard consumers from life-altering losses.
For more updates follow London Pulse News.
