Insights for consumers
Allowing someone remote access to your computer is risky. You should never log into banking or other accounts when someone has remote access to your computer, and you should not allow someone else to create accounts for you. Doing so will show them your log in details and give them access to your account. Once money is taken out of an account, it will be extremely difficult to recover.
What happened?
Khalid fell victim to three scams: the first in March 2022 related to online stock trading, the second in early November 2023 relating to cryptocurrency and the third in late November 2023 relating to an award of money under a (fake) United Kingdom court order.
For the third scam in late November, the scammers told Khalid that they had taken the online stock trading company, from the March 2022 scam to court and the UK court had ordered that Khalid be paid compensation. The scammers told Khalid that he needed to create a transaction history on his account that he had with a money transfer service before he could receive the money under the court order. Believing the scammers, Khalid gave them remote access into his computer and transferred $6,500 from his bank account into his account with the money transfer service over several transactions. The scammers then transferred the money from Khalid’s account with the money transfer service into their own accounts.
Using a fake email address pretending to be the money transfer service, the scammers told Khalid that one of the transfers had failed. Khalid contacted his bank, who told him he had been scammed. Unfortunately, Khalid then emailed the fake email address explaining he had been scammed and asking to stop the transfers. The money transfer service was not told of the scam until the next day. The money transfer service then suspended Khalid’s account and told him he had breached their terms and conditions.
Khalid attempted to appeal the suspension of his account but had difficulty navigating the money transfer service’s website. He lodged an appeal in a phone call in late December 2023, but the money transfer service did not give him a final decision on his appeal until April 2024. The money transfer service declined his appeal and deactivated his account.
Khalid complained to FSCL.
What were the parties’ views?
Khalid complained that:
- the money transfer service should have done more to protect him and to recover his money once he had notified them about the scam.
- the money transfer service had taken too long to process his appeal, and they had not given him any updates for months. This was stressful, upsetting and confusing for him. He explained that he wanted his account reactivated, not because he wanted to use the money transfer service, but so he could see what transfers the scammers had made.
- he did not understand what terms and conditions he had breached, because he did not create his account (the scammers did), so he had not read or agreed to the terms and conditions.
The money transfer service said that by the time Khalid notified them of the scam, the money had already been successfully sent. They blacklisted the recipient’s details and investigated. They said that Khalid’s account had been deactivated due to him being at a high risk of being scammed again.
What was FSCL’s view?
We looked at three key issues:
- should the money transfer service have done more to recover Khalid’s money?
- did the money transfer service take too long to process Khalid’s appeal against his account being suspended?
- did the money transfer service provide Khalid with adequate information about his account and explain they had suspended his account?
We found that:
- it was likely that by the time the transfer service was notified about the scam, the scammers had withdrawn the money from their accounts and the money transfer service could not recover the money. The money transfer service acted appropriately by blacklisting the recipient’s accounts.
- the money transfer service took too long (five months) to process Khalid’s appeal and had not adequately updated him. Because Khalid had difficulty working out how to lodge an appeal on the money transfer service’s website, we recommended that the money transfer service update their FAQ to include a picture showing where to click to lodge an appeal, to help prevent confusion for others in the future.
- the money transfer service provided Khalid with an account statement that gave him the information he needed about the transfers from his account. Although the delay in processing the appeal was too long, Khalid did not need his account reactivated because he did not plan on using the money transfer service again. We agreed that Khalid was at a high risk of being scammed again.
- the money transfer service had correctly applied their terms and conditions by closing Khalid’s account, because Khalid allowed the scammers to create the account for him.
How did FSCL suggest that the complaint should be resolved?
We decided that the money transfer service should pay Khalid $400 non-financial loss to recognise the delay and lack of communication about the appeal application. The money transfer service was not required to pay Khalid for his financial loss, because they did not cause it – the scammers did.
Khalid accepted our final decision, and we closed our file.
