A NW Trust recently received an email request for an appointment from an overseas patient, which is a chargeable appointment. The Trust sent an invoice to the patient, totalling £200 for the initial consultation. The Trust subsequently received a payment of £2,000 - i.e. £1,800 too much.

The patient then made contact with the Trust and informed them that a mistake had been made by their secretary who had put an extra ‘0’ on the cheque, and that they required a refund of the £1,800.

A refund of £1,800 was processed on the same day via faster payment to a UK bank account, which had a different payee name to the patient. This is not an unusual occurrence, as often someone different may pay for the appointment on the patient’s behalf.

The patient sent multiple chase emails to the Trust asking them to confirm the refund and to provide a copy of the refund confirmation, and threatening them with lawyers. This is a social engineering technique, applying pressure to whoever at the Trust is dealing with the situation.

The Trust’s bankers advised that the payment of £2,000 had been made by cheque, paid in electronically, and showed up on the Trust’s bank account as an instant credit. The bank’s own checks deemed the cheque to be fraudulent, and as such, the £2,000 was not paid into the Trust’s bank account.

The cheque itself was in a different name again to the patient and the payee of the refund, but the Trust were not notified of this by the bank at the time.

After the cheque was deemed fraudulent by the bank, and they had concluded their own investigation, the £1,800 was returned to the Trust.

Background

This is an age old fraud, which used to be called the Dubai scam, and is often now referred to as the Cheque Repayment Scam or Cheque Scam.

Historically the “Dubai scam” (named after the location where the fraudsters were often based, originally) worked when an individual agreed to purchase a, normally expensive, item from a seller (individual or business), say for £10,000. The fraudster would then send a cheque for payment of the item for an often nonsensical amount, say £50,000.

The fraudster would subsequently, and almost immediately, act like they had made a mistake in overpaying, and then hassle and pressure the seller to:

a) send the items purchased, and
b) send a refund, often to a different bank and/or bank account the original payment had originated.

In this way, the fraudster often ended up with the goods (or services) as part of the original purchase, as well as the difference, in this case £40,000, hopefully before the scam was identified.

This is a known fraud, if not particularly common to the NHS, but there are also money laundering implications to being the victim of this scam. Could your current processes around cheque receipting and banking arrangements mean that you could potentially launder money for a fraudster or organised crime group?

This is similar to the situation that occurs during university freshers week, where overseas students can sometimes turn up and pay their tuition fees, currently £11,400 per annum, in cash. Mysteriously, a number of them decide to withdraw from the course in the first couple of weeks. The university is honour bound to repay the student, which will be by bank transfer, but has the university laundered £11.400 of dirty money for criminals?

Please consider a review of the arrangements around the receipt and banking of cheques, not just for overseas patients, but also to any Trust charity.

If you are the victim of this fraud, please contact Action Fraud, as well as your bank and your Anti-Fraud Specialist.