Legal Theft

Posted by @ 2:46 pm on Wednesday 3rd August, 2011.

Chris has been banking with Lloyds TSB for about 40 years and in that time she's had acceptable service. Of late, however, things have been going a bit wrong...

A month or so ago she noticed an odd and unauthorised transaction on her bank statement. It was a debit against a Visa Debit card. The statement entry was "NFI*WWW.NETFLIX.CO US 07.99". There was also a fee for the Sterling > Dollar currency-conversion.

She called the bank and complained, the bank investigated and told Chris that "the transaction was for a subscription to a service that streams video to Playstations and X-Boxes". Chris explained that she has never set up such a subscription and that we've never owned either a Playstation or an X-Box. Eventually the bank gave her a refund and supposedly put in place measures to prevent it happening again. As part of those measures, Chris had to destroy her then-active debit card and wait for a new one. Lloyds TSB would further investigate the transaction and would send Chris the details thereof.

Happiness was restored... until last night...

Chris was checking her statement again and found that a further unauthorised transaction for the same bogus subscription, and against the same card, had been allowed after her first complaint. She was furious. She looked again at her statements and realised that both unauthorised transactions were against one of her Visa Debit cards that had expired way back in 2007! We were bemused as to how it would be possible to set up a new bogus subscription using details from a card that had expired four years ago.

When she phoned the bank this morning I had to leave the room and take cover. The bank got both barrels for many reasons - not only for their failure to prevent recurrence, but also for the fact that they'd not sent her those promised details of the first transaction AND for the revelation that they now expected Chris to cancel the bogus subscription herself, despite her having no details of the service or the perpetrator. They gave her a website address and effectively told her to get on with it. Unbelievable!

We checked the website and, after being redirected to here, we found that it proudly states "Sorry, Netflix is not available in your country... yet". So why would Chris ever want such a subscription?



We've done a bit of digging here and we reckon that it's possible (but not certain) that Chris's expired card details were nabbed from Amazon (UK), as it's the only place where we could find said details stored for an online service that Chris has used. Amazon did show the card as "expired". Chris has now deleted all of her card details that were filed with Amazon (UK).

This morning we contacted the Financial Ombudsman Service. It was explained to Chris that the practice of allowing transactions against expired debit cards is uncommon but not illegal - in some circumstances, it is allowed. It's difficult to see, however, how those circumstances apply in this case. Nevertheless, the F.O.S. will send a formal letter of complaint to Lloyds TSB regarding their failure to prevent further unauthorised transactions for the bogus subscription as per Chris's request.

Hopefully Lloyds TSB will address this matter before they lose yet another customer.

FWIW, Chris works for one of the Big Three worldwide express delivery companies, maintaining and developing their Global Accounts Receivable system. What she doesn't know about the legalities, complexities and ethics of international monetary transactions isn't worth squat. Lloyds TSB really shouldn't mess with her, maybe they should employ her instead!

So, dear reader, please be aware that the details of all your expired, cut-up-and-binned/burned Visa Debit cards aren't necessarily dead. They could come back to screw up your finances at any time.

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8 Responses to “Legal Theft”

  1. Teri says:

    Exactly the same thing just happened to me but with my current card- I also use Amazon and have cancelled the card details. Waiting to see if any more amounts are taken - the bank (LloydsTSB) say they cannot put a block on the debits.

  2. BG! says:

    @Teri - Lloyds TSB are lying if they say that they can't block the debits, Teri. If you were to close your account there would be no funds available and so they would have to stop allowing the debits. If you need a debit-card payment stopping, your bank should comply with your request.

    Phone the Financial Ombudsman Service and tell them about it, they're really helpful people and their service costs you nowt.

  3. BG! says:

    Just to clarify matters...

    The bogus subscription set up to take payments from Chris wasn't using the Direct Debit system, it was making claims on her (expired) Debit Card as if they were transactions in a shop.

  4. Teri says:

    Mine is definitely a 4 weekly d/d. On further investigation there have been three in total - beg July, beg Aug, end Aug. Bank says can't canx? This is mad. Wasn't ordered and haven't even got x-box etc we are 60 year old pensioners. Plus this is not even available in the UK.! Surely one can canx a d/d on own account? What's going on?
    Glad we saw your post - there are many more on internet and also lots of problems within USA/Canada.

    It can't be right that someone can take money from your account with no authority and yet you can not stop it with full authority!

  5. BG! says:

    Looks like they started to take from you at the same time as they started to take from Chris.

    Talk to the FOS, they'll sort out the bank.

    Trouble is, that won't stop the problem at source, which is what's really needed. Who to tell, though? The Fraud Squad? Interpol? Anne Robinson?

  6. Teri says:

    Yes BG they started at the beginning of July and have taken 3 x 4 weekly amounts. On closer inspection it is from my debit card (current) but is set up to look like a routine regular debit - obviously these slip by more easily.

    I am going to talk directly to my branch tomorrow and see if the manager there will do something.

    Funny how its both Lloyds and Amazon - got to be a link.

    Maybe someone hacked into Amazons files and Lloyds input systems work easier/different to other banks.

    Anyway it's annoying that we don't seem to be able to say 'don't pay that' out of our own bank accounts. The only thing they can offer me is to wait for a new card and number which is inconvenient and judging from your experience won't solve the problem anyway.

    You are right 'Financial theft is now legal'. Maybe it should be the Fraud Squad to contact as I think the systems need to be changed.

    Bring back the cheque book!.

  7. ChrisP says:

    Terri - you have my sympathy on this one. After I raised a complaint with the Financial Ombudsman, it was explained to me by the complaint handler at Lloyds TSB that as this was a subscription and also below a certain amount, their software does not perform the usual security checks before taking the money from your bank account. Having worked in the IT industry for almost 25 years I never accept the excuse that it is a 'computer problem'. Computers only do what they are told to do by people, believe it or not!

    As a business it would make more sense for Lloyds and would cost them much less money (due to handling fewer complaints) if they put some temporary software into their system to reject debit card requests to NetFlix for subscriptions from bank accounts based in the UK, as the service isn't available here. But that is just my opinion.

    When you see the bank manager, insist that your complaint should not be closed until the debits stop. Do not let them persuade you to contact the company yourself to cancel the subscription. I was asked to do this myself, but refused. I did not want anybody in the US getting any more of my personal details such as my home or e-mail address. These scammers/hackers keep lists of people who have been scammed and circulate lists of people that they have extracted money from between themselves to be used for their next scam.

    My problem has stopped now. I'm not sure if deleting all of my card details from Amazon, or my refusal to close the complaint until the money stopped leaving my account that did the trick. So it is worth trying both.

    Good Luck.

  8. Martin says:

    The same thing has happened to me; 07-99 dollars taken from an out of date Visa Debit Card by Netflix. I have had exactly the same response from Lloyds TSB and have been told that I should close my account and start a new one! I also have an account with Amazon and will try deleting all of my card details.

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