Another golf club is victim of huge fraud scam

Seamus Rotherick
By Seamus Rotherick August 16, 2016 12:06

Waterlooville Golf Club in Hampshire has also been swindled out of scores of thousands of pounds, it has been revealed.

Recently, Hull Golf Club in Yorkshire had nearly £300,000 taken out by fraudsters amid warnings that golf clubs are being targeted as they are less likely to have the necessary precautions to protect themselves.

It has now emerged that in 2014 £90,000 was plundered from Waterlooville Golf Club’s funds and the club has had to take a ten-year loan to plug the black hole.

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‘The club’s bank, NatWest, refused to refund the money. Its intransigence would have ruined Waterlooville if it had not the loan [also from NatWest],’ reports the Mail on Sunday.

The swindle occurred because the club downloaded spyware on one of its computers, and the bank refused to pay because the club did not download its own security software.

‘It is thought hackers were able to steal the cash after sending an email dressed up as an invoice the day before. As the employee was used to dealing with invoices from suppliers, she clicked on the attachment, which may have downloaded ‘spyware’ on to the computer,’ states the paper.

That employee then noticed that NatWest’s website was running slowly, but ‘nothing seemed amiss’.

‘At one point she was asked for a special code during log-in, which she supplied, although typically this is only required at the point when it comes to authorising payment,’ states the paper.

‘The next morning, after logging on to the account, she found nearly £90,000 had been withdrawn in two instalments – £9,700 from the club’s standard business account and £80,190 from the linked savings account.’

According to the report, the bank’s unwillingness to help the golf club should act as a warning to all golf clubs.

‘The bank told the club it would not refund the sum as staff should have downloaded its security software – itself far from infallible – and their inaction amounted to negligence,’ states the paper.

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‘But staff say not only were they unaware that spyware was sitting on the computer, but the bank has failed to explain its own laxity over security.

‘The savings account – from which the biggest sum was stolen – has never been used to make an external payment before. Instead, the club’s subscriptions are paid into the current account and transferred to the linked savings account.

‘Money is moved back monthly from the savings account to the current account to pay bills.’

The club’s chairman, Mark Pinhorn, said a direct transaction from the savings account was a highly unusual payment that should have been flagged by the bank, but it wasn’t.

NatWest agrees that the transactions were not authorised by the employee, but the bank claims ‘gross negligence’ on the part of the club and so says it is not responsible for the fraud.

Last year the club asked the Financial Ombudsman Service to review the case. The Ombudsman mostly helps individuals, but can step in to help small firms with up to ten staff and turnover of less than £1.7 million a year.

As Waterlooville Golf Club has three staff too many, the Ombudsman was unable to help.

But in a letter to the club, an adjudicator said: ‘In view of what has been provided, if I did have power to instruct NatWest to refund the transactions I would. I don’t think NatWest has presented a reasonable reason for declining the complaint.’

A bank spokesman said: “We have every sympathy with the club being the victim of malware fraud. We investigated the case thoroughly and provided a detailed rationale for the outcome.

“We provide extensive security advice to enable customers to prevent malware fraud, through direct messages, emails and access to the security centre on our website.”

 

Seamus Rotherick
By Seamus Rotherick August 16, 2016 12:06
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