Hungary and Eastern Europe has unfortunately become a centre for internet fraud (or online scams). Many foreign companies and private persons turned to me recently with different cases. These cases were different, but also similar in some ways. The common point is usually a Hungarian bank account used by criminals of different nationalities for internet fraud.
The background stories are different: in one case a British family has been scammed by someone advertising a non-existing BMW jeep. They transferred a purchase price of almost GBP 30.000.- to Hungarian bank account they believed to be an escrow account. This type of fraud is so common that it is sometimes referred to as a subcategory of online scams: online automotive fraud.
In the other case a US company payed the purchase price of different electric goods to an old Chinese business partner of theirs. But in the end a scam email coming from a criminal having insider info about the transaction and an email address very similar to the business partner diverted the money transfer to a scam account in a Hungarian bank.
These acts are not only frauds or internet frauds but also money laundring from the point of view of criminal law. But this fact does not usually comfort the victim. The victim’s main goal naturally is to freeze the account as soon as possible and to get back the money.
In order to do this the victim’s first reaction is to call the bank (either his bank or the bank of the other party) Sometimes this helps, sometimes it does not. The banks sometimes shift off action and responsibilty by highlighting that their duty is to save their client’s (ie: the account holder’s) money and they simply must not do anything without or contrary to his instructions. According to this concept it is only criminal authorities who are entitled to give instructions to the bank to freeze the amounts suspicious to be connected with internet fraud.
In my opinion there are several problems with passivity of some banks in this situation. One problem is practical. Delay in these situations lead to fatal consequences: criminals cash the amount quickly and run with it. The other problem is legal. Besides keeping in mind the clients’ interests, banks must also follow many rules prescribed by anti money laundering legislation (AML). It means that banks do have the right at least to suspend (or even to refuse) bank transactions in case the circumstances give rise to the suspicion of money laundering.
Any way: quick legal action is vital in these cases. The earlier the victim communicates the crime to the competent criminal authority the more chance he has to trace and to recover his fraud losses.