Beating the scammers: What to do if you fall victim to a payment scam

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

Disputes

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

Miriam Giorgioni

Geraint Thomas

Partner john.abbott@laytons.com +44 (0)20 7842 8000

Registered European Lawyer miriam.giorgioni@laytons.com +44 (0)20 7842 8000

Partner geraint.thomas@laytons.com +44 (0)20 7842 8000

Luke Arnold

Richard Harrison

Ben Thorogood

Solicitor luke.arnold@laytons.com +44 (0)20 7842 8000

Partner richard.harrison@laytons.com +44 (0)20 7842 8000

Solicitor ben.thorogood@laytons.com +44 (0)20 7842 8000

Russell Beard

Paddy Kelly

Daniel Walter

Partner russell.beard@laytons.com +44 (0)20 7842 8000

Partner paddy.kelly@laytons.com +44 (0)20 7842 8000

Solicitor daniel.walter@laytons.com +44 (0)20 7842 8000

Robert Clark

Nicola Khan

Partner robert.clark@laytons.com +44 (0)20 7842 8000

Solicitor nicola.khan@laytons.com +44 (0)20 7842 8000

Sven Clarke

Rebekah Parker

Associate Partner sven.clarke@laytons.com +44 (0)20 7842 8000

Associate Partner rebekah.parker@laytons.com +44 (0)20 7842 8000

Simon Foster

Will Slater

Partner simon.foster@laytons.com +44 (0)20 7842 8000

Consultant will.slater@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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