No-one wants to be the victim of bank fraud, but if it does happen, you want your bank to act swiftly and to sort it all out.

Unfortunately there are times when banks fall short. Here’s the story of one victim of fraud who found her bank left her without access to her account for two months.

A sophisticated scam

Andrea took a short trip to Germany in April 2019, and told her bank, Barclays, of her plans. While she was in Germany, she had a call from her usual Barclays number, from a member of Barclays fraud team called ‘Dan’. He called to say there was some unusual activity on her account. Her card was being used to take out cash in Scotland – and could she confirm it was her?

It wasn’t.  Andrea had spoken to someone called Dan at Barclays the week before, so it made sense that he was calling her now. Dan told her to move £999 to another account and that her online banking would stop working afterwards, and she’d be sent a new card. Andrea had, unfortunately, been on the receiving end of scam calls from Nigeria in the past and, when she’d reported it to Barclays, she’d received a new debit card. So, this tallied with what she’d been told before.

When Andrea got back to the UK, she went to her local bank and was told she’d been the victim of a fraudulent ‘piggyback’ call. This meant the fraudster had spoofed Barclays number, so it looked like the call came from the bank.

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Frozen out

Andrea’s bank account was frozen and she had no online access to her money. She was told that the fraud team would have to investigate, and that it would be resolved within 21 days. But despite Andrea getting in touch with the bank, almost two months later (50 days), she still couldn’t access her bank account. The £999 hadn’t been returned and, worse still, she was being charged £1.50 a day because she’d gone overdrawn.

There are strict rules about what banks should do, including how quickly they should sort out any problems.

The financial regulator says that banks should refund any unauthorised payments within a few days. The only exception is if it has reasonable grounds for suspecting that you acted fraudulently.

Barclays refund

After Andrea took her story to the press, Barclays did act quickly to sort out the problem. It refunded the £999 and the charges of £94 it had taken. It also paid Andrea £500 for distress and inconvenience. In a statement, a spokesperson for Barclays said: “It is evident that on this occasion we have failed to meet the high standards that our customers can rightly expect to receive. Whilst this has been a complex case, we recognise that it could have been resolved sooner and so have apologised to our customer and offered her £500 for the distress caused.  We can also confirm that the £999 that was lost as a result of a scam, and the charges have also been returned.”

However, it shouldn’t take the intervention of the press before banks do the right thing. Barclays is not the only bank that’s treated its customers like this. The Financial Ombudsman Service, which is the free-to-use complaints service about financial products, received over 12,000 complaints about fraud and scams from bank customers last year – a 43% increase on the previous year.

What banks should do

In 2018, the Financial Ombudsman Service published a report into fraud and scams and the chief ombudsman, Caroline Wayman, said that it wasn’t fair of banks to call customers who’ve been defrauded ‘grossly negligent’, when they haven’t.

The Financial Ombudsman Service looks at complaints individually, but it does have some general guidelines on how it approaches bank fraud. This is their general approach:

  • Unauthorised payments: if a payment out of someone’s account is unauthorised, the starting position is that the bank/building society is liable. The only circumstances where a customer would become liable for an unauthorised payment is where they have failed with ‘intent or gross negligence’ to comply with their obligations as a payment service user. In the case of fraud, that means failing to take what’s called ‘all reasonable steps’ to keep security information safe.
  • Gross negligence:   The Financial Ombudsman Service is unlikely to say that a payment service user has failed with intent or gross negligence if they’ve shared personal information whilst under the spell of a convincing and sophisticated scam. The ombudsman will look at each case individually, though and there may be cases where it thinks you didn’t take ‘all reasonable steps’ to keep your details safe.
  • Banks must show you were negligent: If the bank claims that a customer was grossly negligent, the Financial Ombudsman Service would expect them to provide evidence to show that.

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If think you’re a victim of bank fraud

Contact your bank immediately if you think you’ve fallen for a scam.

If you have been defrauded or experienced cyber-crime you must report it to Action Fraud either online or by calling 0300 123 2040.

You should also report what’s happened to the Financial Conduct Authority either online or by telephoning 0800 111 6768.

If you think your bank has treated you unfairly, and you aren’t satisfied with their response to your complaint, you can take your case to the Financial Ombudsman Service here.

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