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Much regulatory attention across the world focuses on the behavior and professional conduct of financial institutions, ensuring that their customers’ interests are prioritized.
What, however, if the shoe was on the other foot, and a customer successfully defrauded a large institution?
Thomas Meston, who was CFO at British hedge fund and wealth management company Fortelus Capital Management, was reportedly getting ready to leave work on a Friday when he received a call from someone claiming to be from Coutts, the bank with whom Fortelus Capital Management holds its accounts.
He was told by the caller that there had been fraudulent activity on the company’s account, and persuaded Mr Meston to give out sensitive bank details, according to a report today by the Daily Mail.
The call turned out not to be genuine, instead being what is colloquially known as a ‘Friday Afternoon Scam’ whereby imposters pose as bank staff at a time when executives are beginning to wind down for the weekend and are more succeptible to tricks.
Another reason for this timescale being favored by fraudsters is that this is when transactions are usually completed and funds have been transferred.
Bloomberg reported that when Mr. Meston logged on to the firm’s online bank account the following Monday, he saw that £742,668 had gone.
According to court papers, Coutts also had no record of the Friday phone call, and Mr Meston is now being sued by Fortelus Capital Management, which says he breached his duty to protect its assets, however he denies he was negligent and says he acted honestly.
Fortelus Capital Management lawyer Daniel Astaire told Bloomberg that no client funds were affected by the breach, that this was an isolated incdient and that police were now investigating.
Mr Meston ‘believed that he was preventing a fraud from being carried out against the claimants, and this belief was reasonable,’ his lawyers said in court papers.
The Solicitors Regulation Authority recently revealed it was receiving four reports a month of law firms being tricked in so-called ‘Friday afternoon scams’. Fraudsters often gain access to firms online systems via malicious software sent through unsolicited emails, according to a report in the Law Gazette.
Once the software has gained access, the fraudsters then intercept emails in an attempt to take money from client accounts, and often are followed by telephone calls from the fraudsters pretending to be from counter-fraud teams.