Lloyds will hand £7m over to the police, taken from frozen accounts of scammers
In an attempt to stop a rising tide, money from scammers’ bank’s accounts will be used the first time.
Lloyds, Britain’s largest bank, will seize £7m from accounts run by gangsters. It will then be handed to law enforcement officers in a new scheme to combat frauds that fund other financial crimes like drug trafficking and human trafficking.
The pilot project will fund a dedicated unit for scams at the City of London Police as well as a new team of specialists to find criminals using cyber investigations.
The bank stated that funding will be used to support fraud victims by providing one-to-1 phone support, advice, and aftercare as well as online safety classes, for pensioners.
This comes amid increasing fraud levels. £1bn was lost to scams during the first half of the year, nearly a third more than in the same period last.
The money will be taken from accounts that are linked to scammers, whose assets have been frozen and where the bank is unable to trace victims for more than a year.
Although banks claim they do everything possible to help fraud victims, it is difficult to trace the original owner of the money. This is due to the theft taking place too often and the trail going cold.
According to estimates by UK Finance, there were at least £130m in these accounts frozen in 2017. It is believed that the figure could be much higher today.
The current regulations forbid institutions from accessing the money – except to reimburse their original owners. This results in millions of dollars sitting unused.
Campaigners are calling for changes to allow dormant money to be used more easily.
It is hoped that the pilot scheme, which was approved by the Financial Conduct Authority (and the Home Office), will prove successful and open the door to similar projects.
Fraud experts praised the move, but all banks need to make payments to stop rising fraud.
4Keys security firm Richard Emery said that while the idea is admirable, the initial funding was not enough to cover the cost of fighting fraud.
All banks should follow this lead and dig deeper into their pockets. He stated that fraud levels are set to surpass record heights next year and that we need to invest in preventative measures to stop it.
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