EXCLUSIVE
The former head of the Joint Financial Crimes Unit is urgently calling for the Island to close a gap between UK and Jersey protections which he says has led some Islanders to lose “their life savings”.
Barry Faudemer, current chief executive at Baker Regulatory Services, told the JEP that he wrote to the Island’s financial watchdog last year to express his strong concerns over the lack of safety net for Jersey people when it comes to APP fraud but was yet to receive any firm pledge of action.
Authorised push payment (APP) fraud usually involves a fraudster tricking someone into authorising a transfer or sharing banking details that result in a scam payment that appears legitimate.
Last year, the UK implemented a reimbursement scheme requiring payment firms, including high street banks, to refund most victims of APP fraud for qualifying transactions – with a maximum claim amount of £85,000.
But, despite this being “the most common type of fraud being perpetrated”, Jersey is yet to follow in adopting the new protections, Mr Faudemer said – leaving local account holders “exposed to losing their life savings” should they fall victim to such scams.
This is a particular risk for those who disclose security details to fraudsters who they mistakenly believe to be a genuine bank employee, he said.
“I just don’t think the controls or the compliance was there”
One Islander, who did not wish to be named, told the JEP that they had lost tens of thousands of pounds after a scammer posed as a bank employee over the phone.
But they added that they felt that the resulting transactions – which they said were unusually large and went out to a non-UK account with a “dodgy” name and reference – should have been flagged by the bank, noting that similar scams had already been taking place in Guernsey the week before.
“I just don’t think the controls or the compliance was there,” they said.
“Mistakes happen, but if they knew things were going on, the payments should have been stopped.”
“Significant rise” in fraud
The Channel Islands Financial Ombudsman’s 2024 report highlighted “a significant rise in fraud and scam-related complaints” last year.
It also referenced “significant changes in regulatory treatment of fraud in the UK”.
“While not applicable to the Channel Islands, these changes will undoubtedly have implications for evolving views in the Channel Islands about market conduct expectations for FSPs and what fair and reasonable outcomes look like in cases of customer losses due to fraud,” the report stated.
In addition to his time with the Police and Customs Joint Financial Crimes Unit, Mr Faudemer’s background also includes 13 years as the director of enforcement at the Jersey Financial Services Commission.
He said that Baker Regulatory Services had last year provided free consultations for victims of APP fraud, to guide them through making complaints to the Channel Islands Financial Ombudsman and gathering the evidence required when making the complaint.
“We received many approaches”
“We received many approaches from victims, some elderly and vulnerable,” Mr Faudemer continued, recalling that several individuals had “lost their life savings”.
“Most of our victims were duped into believing that they were speaking to a genuine bank employee when they were in fact speaking to fraudster.
“They call at meal times when people are busy and flustered and evenings knowing that bank fraud teams have probably clocked off. Bank holiday weekends are a firm favourite.”
Mr Faudemer said that Baker & Partners wrote to the director general of the JFSC last year calling for the introduction in Jersey of similar protection afforded to UK residents.
“We are yet to see any action arising from the letter,” he added.
The JFSC said: “We welcome scrutiny of Jersey’s efforts to tackle consumer fraud and are working collaboratively with banks, the Government of Jersey, law enforcement, and other agencies to develop a coordinated fraud strategy that strengthens protection for Islanders.
“As an active member of the Jersey Fraud Prevention Forum, the JFSC plays a key role in raising awareness and helping to safeguard the public from fraud.”
