Am I at Fault for Transferring Funds Involved in a Scam?

Question from 123, Am I at Fault for Transferring Funds Involved in a Scam?

Answer from AI:

What the law says

In the United Kingdom, the Proceeds of Crime Act 2002 (POCA) and the Financial Services and Markets Act 2000 (FSMA) require banks to investigate any transaction that looks suspicious. When a bank receives a request for “proof of payment,” it is usually trying to determine whether the money may be linked to fraud, money‑laundering, or other criminal activity.

If you transferred the £800 without knowing it was part of a credit‑card scam, you are generally treated as an innocent intermediary rather than a perpetrator. Criminal liability for money‑laundering typically requires either knowledge that the funds are proceeds of crime or willful blindness. However, you still have a duty to cooperate with the bank and, if asked, with the police.

Immediate steps to take

1. Collect all relevant records

   • Bank statements showing the inbound transfer and the outbound transfer.
   • Screenshots or copies of any messages (texts, emails, WhatsApp) you exchanged with the two friends about the money.
   • Any receipts, invoices, or proof that the transfer was a personal loan or gift.

2. Respond to Nationwide promptly

   • Explain clearly that you received the money from a mutual friend and passed it on to another friend, believing it to be a legitimate personal transaction.
   • Attach the documents you gathered.
   • State that you were unaware the funds were linked to a scam and that you are willing to cooperate fully.

3. Report the incident

   • Contact Action Fraud (the UK’s national fraud reporting centre) to make a record of the scam. This helps the authorities trace the wider fraud network and shows you are acting in good faith.
   • If the second friend is also a victim, encourage them to report the same information.

4. Preserve evidence

   • Do not delete messages or alter bank statements. The police or the bank may request original records later.

5. Seek professional advice if needed

   • If the bank threatens to freeze the account or you receive a formal notice, consider obtaining advice from a solicitor experienced in financial or criminal law. A brief consultation can clarify whether any further steps (e.g., a statutory declaration) are required.

Possible outcomes

• Bank clears the transaction – Once you provide satisfactory proof, the bank may lift any hold on the funds and close the investigation.
• Further investigation – The bank might file a Suspicious Activity Report (SAR) with the National Crime Agency. This does not automatically mean you are charged, but it will be recorded.
• Police involvement – If the police deem there is enough evidence of a wider fraud, they may interview you as a witness. Being cooperative and honest will be crucial.

Key points to remember

• Lack of knowledge is a strong defence against money‑laundering charges.
• Cooperation with the bank and law‑enforcement agencies demonstrates good faith and reduces the risk of adverse action.
• Document everything – clear, dated records are your best protection.
• Professional advice is advisable if the matter escalates beyond a simple information request.

For more detail on the legal framework, see the UK government’s guidance on money‑laundering obligations and the Proceeds of Crime Act 2002 (available on the official legislation site).

By acting promptly, preserving evidence, and seeking appropriate advice, you can address the bank’s request and protect yourself from potential liability.