Why it is difficult for banks and the police to help you when you get defrauded; Case Study 1 (Bank Transfer Method)
Fraudsters are very careful when they want to swindle you.
They try as much as possible to ensure that the funds they steal cannot be traced back to them.
If you get defrauded today, you can spend three years or more, moving from one bank to another, carrying the police and your lawyer along without getting anywhere close to recovering your money.
One of the major reasons this happens is because it is quite difficult to decode the method the criminals used on you. Let me give a simple example to buttress my point.
Case study 1:
Let’s say somebody tells you to send them 20,000 naira so that they can send a product to you.
After you send the money and you do not receive the product within the stipulated time, you can lay a chargeback claim.
A chargeback claim implies that you paid for a product but it wasn’t delivered to you. If you have sufficient evidence about the transaction, your bank can initiate a chargeback request. You could get a refund within a few days or weeks if the business you paid money to is a legitimate one.
However, this is not usually the case if the receiver of the money is a fraudster. The average fraudster may have a collection of hacked bank accounts they can access and transact with at any time. These accounts may belong to people that are either dead or unaware that their bank accounts have been compromised.
When that criminal wants to transact with you, they assume the identity of the account holder of the bank account they want you to pay that money into. After you make the payment, they will quickly transfer the money to another account they have access to. They can run the money to another account again if they so choose.
Then, they will go to a POS vendor and withdraw the money with an ATM card or via transfer. Most POS vendors do transactions anonymously, meaning they don’t verify the identity of the person they are transacting with.
So, as a victim when you report to the bank, it will take a while for them to verify whether your case should be treated as a fraud claim or a chargeback issue.
Difference between Fraud Claim and Charge Back Claim
A Fraud Claim implies that you are not aware of the payment made to an account, while a Charge-Back Claim implies that you made payment to an account but did not get value for what you paid for.
On the surface level when this issue is reported to the bank or the police, it is difficult for the bank or the police to differentiate between what should be treated as a fraud claim or a chargeback claim. As a victim, your word is not always enough. These institutions (Banks and the Police) have to carry out their due diligence to determine how the case should be handled. All of these takes time as these cases are not usually prioritized.
The more the bank accounts the money was passed through, the more difficult it will take to track down the money. This is because an investigation into any new account is treated as a new case. It gets more complicated if these accounts are domiciled in different banks.
Even at the time, they finally get to the last account(s) the money got into, it will now the obvious that the money was liquidated at a POS vendor’s shop. Some even use multiple POS vendors in other to make the tracking more difficult and expensive.
Most times, the POS vendors may not be held responsible for these transactions because their transactions were legally carried out.
This is why it is very important to secure your account at all times by pin locking your phone and sim cards, protecting your ATM cards and pin, amongst other things. Pin locking settings vary with different phone brands. A quick google search can help you with that.
Finally, try as much as possible to carry out due diligence before you make payments to businesses and individuals you meet online, to avoid getting scammed.
The end.
