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Standard Life warns advisers over ‘sophisticated’ email scams

Standard Life has warned advisers they may be liable for losses if they accept instructions from “sophisticated” scammers who hack into clients’ email accounts.

In an email to advisers last week, Standard Life said hacking scams that resulted in money being taken from the provider’s products last year were continuing. But it said the “language, grammar and techniques being used have become more sophisticated”.

Last year, Money Marketing repor-ted that Standard Life clients had been targeted by organised criminal gangs hacking client email accounts. The scammers contacted the client’s adviser, asking them to encash investments to a new account.

Standard Life says client money has been obtained fraudulently in two cases since January.

It says the latest scams seek to build a rapport with the adviser by first asking for information, such as plan values, and may attach an email chain of a previous conversation to add authenticity to the request.

The provider says it strongly recommends advisers do not accept instructions to change client bank account details via email but instead contact the client directly and request sight of an original bank statement.

In the email, Standard Life says: “We will rely on the information you give us. You may be liable for any losses your clients incur as a result of fraudulent or falsified information you hold out as genuine.”

Pinsent Masons partner and civil fraud expert Alan Sheeley says: “Advisers could breach their contract with a client if they do not act on the client’s instructions.

“Advisers could also be liable for negligence if they act on the instructions of one email without asking to see original documentation or having a telephone or face-to-face conversation with the client.”

Thameside Financial Planning director Tom Kean says: “It feels a little bit uncomfortable that Standard Life appears to be washing its hands of liability. But given the level of sophistication of scams these days, advisers would be well advised to verify any email instructions with a phone call.”

A Standard Life spokeswoman says: “We have a robust process in place that means we will reject a transaction if we don’t think the app-ropriate checks have taken place.” 

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. I know it can be busy sometimes, but a few minutes on the phone with a client to double-check a request isn’t a big ask.

  2. This is old news. Our company policy changed twelve months ago to speak to the client to verify any bank changes or encashments – no matter how small. Better safe than sorry regardless of the client contract. I do not see a situation where a client will be upset because you were protecting them.

  3. I know it can be busy sometimes, but a few minutes on the phone with a client to double-check a request isn’t a big ask.

  4. Safer still, Transact (and I’m sure most others) cannot or will not change a bank account without a wet signature and the name on the new account needs to match the Wrap owner in some way.

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