Spellbreaker: Mike Regnier's fraud fighters have saved customers £13.5 million in two years
Break the Spell sounds like a storyline in a fairy tale or, at this time of year, a Christmas panto. But for Mike Regnier, CEO of Santander UK, it is the name of a team of fraudsters based near Liverpool. Their job is to identify customers who have been duped by skilled fraudsters.
So far this year, the team has saved Santander customers almost £5 million, which would otherwise have been stolen from their bank accounts by crooks.
The 16 specially trained staff in Bootle on Merseyside have the delicate task of speaking to customers who are believed to have been set up by convincing criminals. Often the victims do not realize that they have been arrested and even when they are presented with strong evidence, they do not want to believe it.
Scams in which imposters pose as love interests and trick their targets into giving them money are particularly troubling.
Regnier says: 'Some romance frauds are very sad. People feel like they have an emotional connection with someone who is real, but that's just not the case.”
Since the Break The Spell team took action in 2021, they have immediately saved customers an astonishing £13.5 million. That is an underestimate because it does not take into account the additional amounts that would have been at risk if the fraudsters had not been stopped.
According to Regnier, fraud is a particularly British problem. Our 'faster payment system', which transfers funds almost instantly, is a boon to the unscrupulous. This also applies to our mother tongue.
“Because it is an international language, fraudsters speak English all over the world,” says Regnier. “It's easier to fool people in English than in other languages.”
In the past, customers often suffered huge losses when they were victims of fraud, even though they had done nothing wrong. But since 2019, the big banks have been running a voluntary scheme to compensate victims of authorized push payment fraud, which involves fooling customers into sending money to criminals.
However, the voluntary element is about to change. The Payment Systems Regulator will publish detailed guidance on new rules that will make it mandatory for banks to refund customers who fall prey to scammers.
While sympathetic to truly vulnerable victims, Regnier believes this well-intentioned move could create a risk of 'moral hazard' – where customers have no incentive to protect themselves.
He is clearly not convinced by what he calls a 'blanket mandatory repayment approach'.
Regnier says: 'Everyone must be vigilant and everyone must have an incentive to be vigilant. If customers are vulnerable and being exploited, okay, I would find a way to help and support them.”
He points out that social media and phone companies are “not on the hook for reimbursement,” even though they are the springboard for 70 percent of forced payment fraud.
“We see WhatsApp scams and Facebook Marketplace scams happening every day,” Regnier said. “I would like to see other players in the chain of fraud foot the bill.”
Regnier, a former boss of Yorkshire Building Society, took over as CEO of Santander UK, the British arm of the giant Spanish financial services company, in April last year.
He grew up in Surrey and aspires to be an adopted Yorkshireman – if those born there will admit such a thing exists – after moving there 20 years ago.
He lives with his family near the Dales, where he can indulge his love of the outdoors and indulge in Fat Rascals – fruity scones bought from the famous Bettys tearooms.
'Both my children are Yorkshire people. I'd like to think I'm a naturalized Yorkshireman now, but that's a long-term project,” laughs Regnier.
A sense of exasperation arises when I mention rival Nationwide's TV advert, featuring actor Dominic West, highlighting the widespread closure of bank branches.
“It's a striking ad, but to be honest I'm a little frustrated,” Regnier said. 'If you look back over the last few years, Nationwide has closed 23 branches and we have closed six.
“Will we have 450 forever? Don't know. We need to continually assess the size of the network. But this year and next we will be renovating 49 branches. I still believe in branches, but it is certain that customer demand for branch banking continues to decline.'
Santander's own humorous ad campaign is about Ant and Dec and their silly banking ideas. This is perhaps ironic, as one of his greatest passions is making Britain more financially literate.
Earlier this year, Santander teamed up with online educational publisher Twinkl to launch a program to teach children how to manage money.
Regnier first taught a class of nine and ten year olds at Hazelbury Primary School in Edmonton, North London, alongside Twinkl's boss.
“We are extremely passionate about teaching students how to budget in schools,” says Regnier.
'Financial education is not a compulsory part of the national curriculum, but we strongly believe it should be.'
He points out that nearly 70 percent of adults believe that lessons on managing finances would help them better manage living expenses.
The link between financial literacy and poverty is strong. Nearly half of those experiencing financial problems admit that poor money management skills are a key factor in their plight.
“It screams to me that we just have to go ahead and do this,” Regnier said.
The banks themselves have made a lot of money. Santander UK's first quarter profits rose 11 percent to £547 million, but Regnier denies any profit was made.
“The sector as a whole is having a good year,” he says. “But it appears that bank rates have peaked and 2024 may be a bit more challenging. The UK banking sector is struggling to generate returns in line with the cost of capital.”
Santander is not predicting a major drop in house prices, despite a decline in mortgage lending.
A typical borrower whose home loan comes at a fixed rate or discount will have to pay an extra £250 per month, he says. But Regnier argues that the situation now is not nearly as bad as it was in the late 1980s, after the global financial crisis triggered a wave of negative equity, repossessions and borrowers handing over their keys.
“The big difference now is that people have more equity in their homes,” he says. “So the stress level isn't that bad for many.” Less than 2.5 percent of mortgage customers are currently in arrears.
Santander UK's Spanish parent company is toying with the idea of getting rid of its UK operations. Maybe that will be on the agenda again?
'One of the reasons Santander is in Britain is that it wanted to be present in Europe's largest financial services industry. But if the bank in Britain wanted to sell, I might be the last to know,” he says, smiling.
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