Beating the scammers
What to do if you fall victim to a payment scam
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Beating the scammers What to do if you fall victim to a payment scam If you discover that your business has fallen victim to a payment scam, it is essential you act quickly. Below, we provide some guidance on immediate practical steps to take should you discover that your business has fallen victim to a payment scam and we summarise the main options for legal action to try to recover misappropriated funds.
Russell Beard Partner russell.beard@laytons.com +44 (0)20 7842 8000
Beating the scammers | What to do if you fall victim to a payment scam
Immediate practical steps
Legal action
You should immediately:
There are options for legal action, which merit consideration, particularly where the sums involved are large, but which
•
•
Inform (1) your bank and (2) the receiving bank of
all entail further expenditure against, in all likelihood,
the fraud, providing relevant details of the fraud and
speculative prospects of recovery; it is important to consider
the payment(s)
proportionality. They include:
Ask your bank if it can take any steps to recall the payment – an indemnity in favour of the receiving
•
•
Applying for an order requiring the receiving bank
bank may be required
to disclose information relating to the first layer
Ask the receiving bank to suspend payments from
recipient, the account and transactions on it
the receiving account – it can freeze the account if
•
•
•
A freezing order against the recipient once identified
on notice of fraud, but do not expect the receiving
(it may not, at this stage, be possible to identify
bank to be helpful in providing information as it will
anyone further up the fraudsters’ food chain) to
in all likelihood assert data protection obligations
freeze the accounts and other assets – a freezing
Report to Action Fraud (www.actionfraud.police.
order will usual require the fraudster to identify
uk) and the police in the jurisdiction of the receiving
other assets; however, if the money has already been
bank (if outside the UK) - provide crime reference
moved, there may be no, or no significant, assets
numbers to both your bank and the receiving bank
against which to enforce such an order
Consider whether you have any relevant insurance
•
and, if so, report immediately
account and it can be identified as your money •
The sad reality is that, in most cases, it is likely to be difficult to
is usually moved very quickly from the receiving bank and
Court proceedings to seek an award in relation to the misappropriated money against any identifiable
recover your outlay if the receiving bank has already dispersed it by the time it receives notification of the fraud. Money
A proprietary injunction if money remains in the
individuals involved •
Considering action against the receiving bank, but options are generally limited
stooges are often used at the first “layer” of receipt to protect those behind the scam.
If individuals are identified and prosecuted on criminal charges, the criminal court has a discretion to make a compensation order in the victim’s favour, if the defendants have identifiable assets from which to pay. Laytons is assisting an increasing number of clients affected by payment scams to target recovery of misappropriated funds.
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Beating the scammers | What to do if you fall victim to a payment scam
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Avoidance, Management & Resolution Our specialist team is experienced in avoiding, managing and resolving claims and disputes in a variety of contexts. Our work involves the identification of legal problems and solving them by effective advice and negotiation. Where necessary we use litigation in a variety of courts and tribunals.
Our Team John Abbott
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Partner russell.beard@laytons.com +44 (0)20 7842 8000
Partner paddy.kelly@laytons.com +44 (0)20 7842 8000
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Partner robert.clark@laytons.com +44 (0)20 7842 8000
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This information is offered on the basis that it is a general guide only and not a substitute for legal advice. We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.
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