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What to do if your bank won't refund money lost to a scam

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what to do if bank wont refund money to scam fraud audvice - Alamy
what to do if bank wont refund money to scam fraud audvice - Alamy

Britons have been conned into sending hundreds of millions of pounds to fraudsters posing as bankers, investment providers, police officers and other officials.

While money stolen through fraudulent credit card payments, stolen bank cards or other unauthorised payments is typically refunded without question, thefts where a customer willingly sent the money under false pretences are a murkier area.

Often, victims have realised quickly after sending the money that they have been scammed. But the speed with which the money is moved means their cash can be gone forever within minutes. They must hope their bank will reimburse them.

The "contingent reimbursement" code, overseen by the Lending Standards Board, stipulates banks should reimburse customers who lose money to these scams unless they ignore warnings or act with “gross negligence”.

Major lenders such as NatWest, HSBC, Lloyds and Barclays have signed up to the code but many smaller lenders and private banks have not.

The patchwork of standards and the loose definition of negligence contribute to the fact that less than half of fraud victims are refunded by their banks.

As many of these payments are sent using banking apps and online payment systems, banks have introduced warnings when customers try to pay someone new.

The recently introduced "confirmation of payee" system means that banks can check that an account number and sort code match the recipient’s name. It means a potential fraud victim who has been told that they are sending money to an account in their name will spot that this is a lie. But not all banks are signed up to this system, and victims can be told by criminals that the name is temporary.

While these warnings have helped to flag potential frauds to consumers, it also means the banks can argue that customers who still send the money have done so willingly and deserve no compensation.

If you are a victim of this fraud, here’s what to do.

Ask your bank

The first thing to do is to immediately report the fraud to your bank, as there is still a chance it can recover the money. Other avenues of complaint may not be open until you do this.

If you have been on the phone to a fraudster, make sure you have hung up the phone. Dial the number to your bank on the back of your bank card. Ask to immediately be connected to the fraud team. Ask them to stop any payments. Make a note of how quickly you were connected, what was said to you and how fast the bank acted. Ask how you can obtain a refund.

Now make a note of the fraud’s exact train of events including dates and times, who contacted you and what they said. These records are important in showing how you were persuaded to send money. It is important to show that at the time the money was sent, you were not grossly negligent, you did not ignore effective warnings and that you thought it was a legitimate payment.

If you bank has signed up to the contingent reimbursement code, your bank can refuse your refund if any of the following are true:

  • You ignored effective warnings that the payment might be part of a scam

  • You did not reasonably believe your were paying someone who was genuine or legitimate business

  • You were grossly negligent. The code does not provide a definition for this.

Tell Action Fraud

Action Fraud is the fraud reporting service for City Of London Police and the place to report the crime. While there is no guarantee the money will be recovered, the figures can at least help show to the government the scale of Britain's scam problem.


If your bank does not reimburse you, raise a complaint with the bank. Your bank should advertise how to do this. If not, ring the same number you rang to report the fraud and ask how to complain.

Failing that, you can call the Financial Ombudsman Service to see if they can help. You should do this within six months of the bank’s final response. This process may take several weeks.

Write to your MP

Fraud is on the rise and police chiefs have spoken out about how they lack the resources to pursue many of the crimes.

Some MPs want all banks to sign up to the reimbursement code and pay out when money is lost. Others want stricter rules for tech firms and telecom companies who host the scammers.

Your MP may be able to make your case to your bank and you can ask how they are helping fight fraud.

Criminals are making use of lax regulations when it comes to cloning the website of legitimate firms, a spree of fake text messages plaguing the airwaves and cheap untraceable phone calls.

Campaigners want the law to make it the responsibility of tech and telecom firms to crack down on these opportunities for criminals.

Take them to court

If none of that has worked, you feel you were genuinely scammed, and you have the time and resources, you can take your bank to court.

A solicitor can advise on the likely outcome of your case and whether they think your bank could have done more to prevent the fraud.

Private prosecutions against scammers are also thought to be on the rise. If you have lost a large sum and think there could be enough evidence to catch the scammers and recover the money, this is an expensive but possible avenue.

And finally, Telegraph Money has recouped millions of pounds of readers’ money, including those who have been victims of scams. Our consumer champion is here to help. For how to get in touch click here.