Unauthorised payments from your account

Your bank must refund you for an unauthorised payment, except in certain circumstances. Find out your what your rights are when money is taken from your account without your permission.

Money can only be taken from your current account, card-based account or (in some cases) an instant-access savings account if you have authorised the transaction or your bank can prove you were at fault.

If you notice a payment out of your account that you did not authorise, you should contact your bank immediately.

If you are sure you did not authorise a particular payment you can claim a refund.

The bank must refund the payment immediately unless it has evidence that there is a reason to refuse a refund, as explained below. This is so it can look into what happened, but it must do this as quickly as possible.

Your bank may ask you to answer some questions and fill out a form confirming what has happened, but it cannot delay your refund while it waits for you to return the form.

You should be aware that deliberately making a false claim that a payment was unauthorised is fraud and your bank could report it to the police.

Refund of charges and interest

When your bank refunds an unauthorised payment it must also refund any charges and interest you have paid because of the unauthorised transaction.

If the transaction was on a credit card, fixed-notice savings account or cash ISA, or was made by a cheque, you may not receive the refund immediately. But the card issuer cannot charge interest or ask for repayment of the amount unless it can prove you are liable to pay.

Why a refund can be refused

Your bank can only refuse a refund for an unauthorised payment if:

  • it can prove you authorised the transaction – though your bank cannot simply say that use of your password, card and PIN conclusively proves you authorised a payment
  • it can prove you are at fault because you acted fraudulently or because you deliberately, or with ‘gross negligence’, failed to protect the details of your card, PIN or password in a way that allowed the transaction
  • you told your bank about an unauthorised payment 13 months or more after the date it left your account, so make sure you contact the bank as soon as possible

You may have to pay up to the first £50 of an unauthorised transaction if your card has been lost or stolen, or your bank can show you failed to keep the details of your password or PIN safe.

However, you will not be liable for any unauthorised payments made after you notified the bank or card issuer of the loss, theft or unauthorised use of your card or password – unless it can prove you acted fraudulently.

If your bank refuses to refund an unauthorised payment, it should explain why.

How to protect yourself

When you receive a debit or credit card, or sign up for online, telephone or mobile banking, you should be told what you have to do to keep your details secure.

It is important that you protect the personal information that allows you to access your account, such as your password or PIN.

Your bank or card issuer will also tell you how to notify it – which you should do as soon as possible – if your card is lost or stolen, or you think someone else knows your password or PIN.

When a bank can claim your money

Your bank may be able to claim money from one of your accounts to pay your debt in another account under its right to ‘set-off’.

This could happen if you miss loan or credit card payments and you also have a current or savings account with the bank.

If a bank wants to claim money from your account to pay a debt, it should:

  • tell you about its right of set-off at least 14 days before it is used on your account for the first time, and where appropriate on any further occasion
  • estimate how much money needs to be left in your account to meet your priority debts and essential living expenses like a mortgage, rent and food bills
  • refund you, in most cases, if the bank later realises that money taken in set-off was intended for those priority debts or essential living expenses
  • not use set-off on money it knows or should know is intended for certain purposes, such as where the NHS provided it for healthcare or a third party is entitled to the money
  • tell you promptly when set-off has been used on your account

The right to claim money from your account to pay a debt should also be clearly explained in your account terms and conditions.