Bank scams: How to get your money back if you’ve been scammed

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Banking scam: Caller details having £2000 stolen from account

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Over 40 million people have been targeted by fraudsters using various cost of living scam tactics so far, research by Citizens Advice revealed in June. From fraudulent emails claiming to be from Ofgem asking for bank details to receive the £400 energy rebate, to texts claiming to be from the DWP asking people to apply for cost of living payments, Britons are being hit with an influx in what some might seem as more ‘realistic’ scams as the months go on.

According to the UK Finance report on scams, fraud leapt from £1.2billion in 2020 to £1.3billion last year.

However, this slight increase has not been evenly attributed to different scam types.

Authorised Push Payment (APP) fraud, which is the term used to describe when a payer is deceived or defrauded into authorising a payment to a scammer, saw a 40 percent increase to more than £580million in losses.

With this type of fraud on the increase, many might be wondering what to do in this situation, or whether consumers have any right to get the money back.

Steven McGarry, commercial law barrister at 3PB Barristers told “If you are a victim of Authorised Push Payment fraud, you should speak to your banking provider first.

“Each instance will be dealt with on a case-by-case basis as there is no one-size-fits-all.”

Are bank reimbursements mandatory?

Currently, according to Mr McGarry, when a payment takes place in accordance with the unique identifier (using the person’s account number and sort code), Regulation 90 of the Payment Services Regulations 2017 states that a payment service provider would have “correctly executed” the payment.

Mr McGarry clarified: “As such, bank reimbursements are not mandatory.”

He continued: “That said, the Payment Systems Regulator (PSR) and the payments industry have worked together to both prevent fraud and develop better mechanisms for reimbursing scam victims.”

The voluntary Contingent Reimbursement Model (CRM) Code, launched in 2019, has been signed by 10 banking groups who agree to voluntarily reimburse APP fraud victims, according to Mr McGarry.

He said: “The Code covers 90 percent of relevant transactions.”

So, if the victim’s bank is a signatory to the CRM Code, the bank will investigate the case and look at reimbursing them for the loss, as long as the person acted appropriately, according to Payment Systems Regulator.

The bank will assess the case under the Code and make a decision on reimbursement; it should also provide reasoning.

The 10 firms signed up to the CRM Code, covering 21 UK banking brands include:

  • Barclays Bank UK plc – Barclays
  • The Co-Operative Bank Plc – The Co-Operative Bank plc, Britannia and Smile
  • HSBC UK – HSBC, First Direct and M&S Bank
  • Lloyds Banking Group – Lloyds Bank, Halifax, Bank of Scotland and Intelligent Finance
  • Metro Bank
  • Nationwide Building Society
  • NatWest Bank plc – Royal Bank of Scotland, NatWest Bank and Ulster Bank
  • Santander UK – Santander, Cahoot and Cater Allen Limited
  • Starling Bank
  • Virgin Money UK

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Victims may also be able to get their money back via the chargeback scheme.

The main requirement to get money back through chargeback is that there’s evidence there’s been a breach of contract, for example, the person didn’t get what they paid for, and the “firm” will not provide a refund.

Mr McGarry explained: “This is dependent on whether their debit and credit card providers subscribe to the chargeback scheme.

“For direct debit payments using the BACS scheme, there is a direct debit guarantee.”

However, Mr McGarry warned the real barrier with the chargeback scheme is that it does not presently cater for Authorised Push Payment fraud.

Another route to reimbursement is through the Consumer Credit Act 1974 (CCA), if a transaction has been made using a credit card.

Mr McGarry said: “Under the CCA, the credit borrower (cardholder) is not responsible to the lender for any loss arising from another person who is not acting as the borrower’s agent (be it a friend or family member).”

However, this can also come with a challenge.

Mr McGarry said: “If a borrower gives their credit card to someone else to make purchases for them, but that individual makes further transactions that the borrower did not authorise, that someone will still be treated as the borrower’s agent.”

The difficulty is that currently, “consent” is taken as the cardholder providing payment details.

According to Mr McGarry, Section 84 of the CCA states that unless a credit card is lost, stolen or liable to misuse, the card user may be made responsible for the following:

  1. A total of £35 (or the credit limit if lower) for losses arising from the use of the credit card between the period starting when the credit card was not in control of an authorised person, and ending when the credit card is back in their control.
  2. All of the loss from the use of a credit card where it has been acquired by a person with the borrower’s consent.

Overall, if a person’s been scammed, there are routes they can take for reimbursement, part reimbursement, as well as action to report the scam to prevent it from happening again.

In the event of a scam, victims should first contact their bank immediately if any financial or sensitive information is handed over to an unauthorised person. They should then report the scam.

Scams can be reported to a number of bodies, such as Citizens Advice and Action Fraud.

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