It's time to PIN down the banks in the prolonged battle against card fraud
Despite chip and pin technology becoming compulsory in 2006, figures released by the UK payments association Apacs show that last year, phone, internet and mail order card fraud increased to £300m and counterfeit fraud to £170m. However, banks often take a hard line when customers try to obtain refunds for fraudulent transactions.
Typically, banks claim the customer acted irresponsibly and so is not entitled to a refund. For example, in a case I recently dealt with, a bank refused to accept a customer had reported her card stolen until she produced mobile phone records proving she had placed the call. In light of this attitude, how can you get your money back?
First, you should trigger the bank's formal complaints procedure. Point out that under paragraph 12.12 of The Banking Code, banks must refund all funds withdrawn fraudulently where the customer retains the card, and all but £50 where a card is lost or stolen. You can access The Banking Code at http://www.bankingcode.org.uk/pdfdocs/PERSONAL_CODE_2008.PDF
There is one exception: where a customer has acted fraudulently or without reasonable care. So make sure you do not write down your pin or tell anyone what it is. Also, be quick to report lost or stolen cards or fraudulent transactions. Build up a paper trail – keep copies of letters and emails, and write down details of telephone calls. The more accurate the detail you can provide to the bank, the better.
If this doesn't work, you have six months to contact the Financial Ombudsman Service for an independent adjudication. This is a free service utilised by filling out a simple form. It can result in a negotiated settlement, or a decision by the ombudsman to which the bank will adhere but which does not bind you. For guidance on how the ombudsman may approach your case, see http://tinyurl.com/ ombudsmancashmachine
Finally, you can go to court. If your claim is for £5,000 or less, use the small claims process. It is designed to be used without the need for lawyers and results in a county court judgment.
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