‘It’s very troubling’: thieves use vulnerable man to take out £28,000 bank loan

The family of a deaf man who was groomed by a gang into taking out a £28,000 business loan has demanded to know how a vulnerable person, with virtually no assets, could be marched into a Metro Bank, and allowed to borrow such a huge sum.

Peter James*, who has special educational needs, and who only communicates through British Sign Language, was being chased by the bank’s debt collectors, and facing possible bankruptcy, before Guardian Money became involved.

His case, one of the most unusual that we have featured in some time, raises questions about how banks treat people who need help communicating, and what safeguards are in place to stop them being taken advantage of.

It also highlights how difficult it can be to communicate with Metro Bank when things go wrong.

The story of what happened to James is somewhat muddled as it was almost four years ago, and the family has only learned exactly what happened in the past two weeks.

In 2020, James was taken to the Ilford branch of Metro Bank in London, where one of the people with him claimed to be acting on his behalf. There they opened a bank account in his name.

Once they had presented his ID and he had signed the forms, they disappeared along with his newly issued debit card.

At some point later, they applied for a business bounceback loan from the bank, and this was paid into the newly opened account.

James, who lives in a south London council flat with his wife, who is also deaf, had problems during lockdown when his identity was stolen. Covid support grants were applied for, according to his father-in-law, Steve Hall*. HMRC, he says, quickly realised these applications were nothing to do with his son-in-law, and stopped chasing him for repayments.

It advised him to get Cifas (Credit Industry Fraud Avoidance System) registered, which acts as a warning to other lenders faced with credit or loan applications. That was not in place when the loan application was made to Metro Bank, and there were no alarm bells until default notices started arriving on James’s doorstep in late 2021.

The family explained the situation to the bank. However, rather than accepting it had been defrauded, Hall says Metro Bank held his son-in-law responsible, steadfastly refusing to reveal any information about the loan, or how it was taken out, and continued to demand repayment.

The family, who attended their local Metro Bank branch, and even issued several subject access requests for information that were all ignored, say they only learned the exact details after Guardian Money’s intervention.

“I help my daughter and, inevitably, her husband, with their financial affairs, and initially thought this must be another case of identity theft,” Hall says.

“Getting the details out of my son-in-law has been very difficult, but it now looks as though he has been groomed by a gang.

“Through a relation of an old school contact he met – he doesn’t even know his surname – he was promised some kind of work in a new business.”

He was told to bring his passport for a meeting, was picked up from work in a Mercedes car and forced to hand over his phone.

He was then taken to the Ilford branch of Metro, where the account paperwork was processed.

Throughout this, his contact did all the talking on his behalf, signing the instructions to him as they went. James says he had no idea a loan was being taken out, let alone one in his name.

“At the end of all this, he says he was dropped back at the tube,” Hall says. “He had to hand over the bank card in exchange for his phone, and the group disappeared with both the card and, we now know, £28,000.

“Peter says that as he got out of the car, the person signed that he would contact him the next day about the work, told him to be careful and to keep his mouth shut. He never heard from him again.”

This case would not be the first time a vulnerable person had been used by people purporting to be their friends, or by promising them well-paid work.

Metro Bank agreed to write off the loan after the Guardian took up the case. Photograph: Mike Egerton/PA

What the family can’t understand is how Metro decided he was worthy of such a loan. Hall says that while his son-in-law has a steady job, he lives in social housing, and has virtually no discernible assets, with the possible exception of two PlayStations.

Meanwhile, the family has also questioned why staff at the branch did not ask to see any ID of the person who accompanied him.

“When we went to the Metro branch to try to get some answers, we all had to produce our ID, but it seems the person who was interpreting while this loan was taken out, didn’t,” Hall says.

“How can a bank give such a large loan to an obviously vulnerable person without authenticating the person acting on their behalf. It is all very troubling.”

After Guardian Money took up the case, Metro Bank has agreed to write off the loan and will no longer be pursuing James.

It says this decision was made on the basis of the new information that has come to light, of which it was previously unaware.

It says: “Investigating this case revealed how unscrupulous scammers are – they will prey on anyone.

“We would like to remind your readers to be wary of being rushed, or pressured, into opening financial accounts and credit cards, sharing personal details (passwords, account numbers, security numbers, passcodes, etc) and even handing over/transferring money. All of these are red flags for a fraud, in addition to the more obvious one of someone threatening you.

“If you are in any doubt, contact your bank as soon as it is safe for you to do so, to share your concerns.”

It says that it is not Metro Bank policy to ask for the ID of anyone attending a branch with one of its customers, even when that person is applying for a significant loan, meaning this could happen again.

For its part, the family has called on Metro to learn lessons from the case.

Ultimately, though, they are just delighted that they can put the matter behind them now that the loan has been written off.

“I’ve just paid my annual £75 (subscription) to the Guardian, which seems a ludicrously low price to pay for such service,” Hall says.

* Names have been changed

The option of only being able to make big bank transfers when you are at home, or running any big payments past a close friend or relative, are among new tools to fight scammers that are being offered to customers of the digital bank Monzo.

There were almost 3m confirmed cases of payment fraud last year, with a combined value of £1.2bn.

As well as authorised push payment (APP) scams, where someone is persuaded to transfer money to a fraudster, customers also need to be wary of shoulder surfing, where a thief watches for their phone password before swiping their device.

Monzo’s security controls will now let customers set up “known locations”, which they will need to be in if they want to make a bank transfer or withdrawal over a limit of their choice. If anyone attempts a transfer outside those locations, it will be refused.

Make sure no one can see when you enter your phone’s password. Photograph: deepblue4you/Getty Images/iStockphoto

The “trusted contacts” tool will allow customers to set up family members or friends to check any transaction over their set minimum, while a secret QR code will let them verify their identity with an individual code stored on a different device or on paper.

Monzo – which operates as an app-based service – says its security controls “add a much-needed moment of pause while in the process of transferring money out of an account, encouraging people to stop and think about whether they’re being targeted by fraudsters”.

Customers can choose whether to opt in to the controls or not, but if they do decide to use them, they must choose two so that there is a second backup check if the first fails for some reason.

The Guardian

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