Fraud: how to get your money back

24 June 2009

Figures from CIFAS, the UK's Fraud Prevention Service, reveal a 20% increase in identity fraud during the first three months of 2010, when compared to the same time period in 2009. Over 27,000 victims of impersonation were recorded by CIFAS members in the first quarter of 2010 - an increase of just over 6,000 from the 2009 figure.

Consumer rights body Which? claims that as many as one-in-four people has been targeted by identity fraudsters at some point. However, it says a “lack of guidance” means banks may be able to refuse refunds to people who have lost money on the grounds that they were negligent with their PIN.

There are two different sets of rules governing refunds from fraud, depending on whether the money stolen was ‘credit’ (such as on a credit card or overdraft) or the victim’s own money.

The Consumer Credit Act, which covers the theft of 'credit’, states that liability for unauthorised withdrawals or purchases lies with the cardholder for the first £50 - this technically means that, even if they have been negligent with their PIN, the cardholder is only liable to pay the £50 of the losses incurred. If money is stolen after the cardholder has informed their provider of the theft, then they are not liable for any money.

In contrast, The Banking Code covers the theft of people’s own money – from a current account for example. The Code states that a victim of identity fraud is liable for their loss if they acted ‘without reasonable care’ – this includes writing down their PIN, failing to take due care of their card or failing to inform their provider about any loss or theft.

However, Which? is concerned that there are many instances where banks are failing to reimburse victims of identity theft because the rules surrounding the term ‘without reasonable care’ are not clear enough.

From November 2009, the regulator - the Financial Services Authority (FSA) - took over responsibility for retail banking, and Which? has called on it to provide more detailed guidance on the evidence banks have to give in card fraud cases.

What to do if you fall victim to identity fraud

If you have been a victim of card fraud, your first port of call is your provider. As well as arranging for a new card to be sent to you, you should find out how you can go about recovering your lost money.

However, if it rejects your reimbursement claim – perhaps because it says you were negligent with your card details – then you have the right to apply to the Financial Ombudsman Service.


This service is completely free; however, the Ombudsman’s role is to settle individual complaints between consumers and financial services companies, so if it also rejects your claim then you may have to pay to take legal action through the courts.

The Ombudsman says it receives between 250-300 cases of plastic fraud each month, up from around 150 six months ago, of which around 50% are upheld in favour of the consumer.

Emma Parker, spokeswoman for the Financial Ombudsman Services, says it would be hard to implement hard and fast rules relating to the term ‘without reasonable care’ as complaints are best dealt with on a case-by-case basis.

Parker uses the example of a victim of identity fraud who wrote down her PIN in Bangladeshi. However, because she lived in a household where the other occupants were able to translate this, she was not deemed to have taken reasonable care with her card details.

In another example, a woman had written her PIN using runes, which the Ombudsman felt was more acceptable because it was harder for a fraudster to ‘translate’.

Prevention rather than cure

Having to complain to your bank, or even the Financial Ombudsman Service, is a stress most of us could do without. It is far better to avoid falling victim to fraudsters in the first place, and ensure you adhere to the rules regarding compensation.

* Rather than writing down your PIN, try to memorise it. Of course, this is easier said than done – many people have more than one PIN as well as numerous passwords to remember. One option is to try and use the same PIN for everything. But while this may make it easier to remember, it also increases your risk of theft should fraudsters get their hands on this number.

* You can change your PIN number to something easier to remember. But choosing your birthday, or wedding anniversary, can also make it easier for people to guess.

* Never disclose your PIN – even to friends and family. Under the Consumer Credit Act, you could be liable for any losses if the money was taken by someone who obtained possession with your consent. When entering your PIN, make sure no-one is looking over your shoulder and always shield your number.

* If you do need to write down your PIN, disguise it carefully and store it separately from your card. Some people create an alias name in their mobile phone address book and turn their PIN into part of the contact telephone number. Just don’t make your pseudonym too obvious – such as ‘Nat West’.

* Check your bank statements carefully, keeping an eye open for any unexplained transactions. Contact your bank if you think you have been targeted by fraudsters.

* Once you’ve checked your bank statement, don’t just store it away in a drawer. Either opt out of paper copies or shred them. This is vital if you want to keep your personal information and banking details private from fraudsters. It’s also worth removing your personal information (such as your date of birth) from social networking sites. 

* If you think your card is missing, then it’s wise to cancel it as soon as possible. The hassle of waiting for a new one to be issued may well be less than dealing with the aftermath of identity fraud. Equally, if you think someone might have seen your PIN while you were making a payment or withdrawing cash, then consider changing to a new PIN as soon as you can.


Victim of online transfer, in 2016, the banks refuse

Victim of online transfer, in 2016, the banks refuse to help . Because as they said they just executed my instructions. I totality desagre with that but the bondsman are on the bank side. This is not fear. I’m the victim . I lost £50000 , this experience has change my life

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