In most circumstances, your bank must refund you for an unauthorised payment. Find out about your rights when money is taken from your account without your permission.
Money can only be taken from your account if you’ve authorised the transaction.
If you notice a payment from your account that you didn’t authorise, you should contact your bank or other payment service provider immediately.
You won’t be responsible for any unauthorised payments after you’ve told your bank or card issuer of the loss, theft or unauthorised use of your card or password – unless your bank can prove you acted fraudulently.
Claiming a refund
If you didn’t authorise a payment, you can claim a refund.
In most cases, the bank must refund the payment without unnecessary delay. This should be by the end of the next business day, unless the bank has reasonable grounds to suspect that you acted fraudulently.
Your bank may ask you to answer some questions and fill out a form stating what happened. But it can’t delay your refund while it waits for you to return the form.
You should know that deliberately making a false claim for a refund is fraud, and your bank could report it to the police.
When your bank refunds an unauthorised payment, it must also refund any charges and interest you’ve paid because of the transaction.
You can make a claim for a refund to your bank or other payment service provider, even if they weren’t involved in the transaction.
If you used the wrong payment details and paid the wrong person, the bank that received the payment must help you get your money back.
If they can’t get your money back, you may be able to take court action to recover it.
Why a refund can be refused
If your bank refuses to refund an unauthorised payment, it should explain why.
It can only refuse a refund if:
- it can prove you authorised the transaction – however, your bank can’t simply say that the use of your password, card or PIN 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
If the unauthorised payment was from an overdrawn current account or a credit card payment, your bank can only refuse a refund for an unauthorised payment if:
- it can prove you, or someone acting on your behalf, authorised the transaction – however, a firm can’t simply say that the use of a password, card and PIN proves you authorised a payment
- the loss was due to the use of a credit token by a person who acquired it with your consent
You may have to pay up to the first £35 of an unauthorised transaction, if your card was lost, stolen or misappropriated. This won’t be the case if you weren’t aware of the loss, or the bank was at fault.
Protect yourself from unauthorised transactions
When you receive a debit or credit card, or sign up for online, telephone or mobile banking, you should be told what to do to keep your details safe.
It’s important that you protect your 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 get in touch if your card is lost or stolen, or if you think someone else knows your password or PIN. Contact your bank as soon as possible if this applies to you.
Authorised push payment (APP) fraud
APP fraud is when a fraudster tricks you into making a payment to an account controlled by them.
This is different from other kinds of fraud, for example, when a fraudster steals money from your account without you knowing. With APP fraud, you authorise the payment, albeit under false pretences.
If your bank or other payment service provider has signed up to the code of practice for APP scams, you can expect to get your money back if you weren’t to blame for the success of a scam.
Get in touch with your bank or payment services provider as soon as possible if you think you have been scammed.
When a bank or payment service provider can claim your money
Your bank or payment service provider 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 a loan or credit card payment 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 to set-off at least 14 days before it is used on your account and, when appropriate, on any other occasions
- estimate how much money needs to be left in your account to meet your priority debts and essential living expenses like your 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 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 quickly 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’s terms and conditions.
You must receive a full response to complaints that involve rights and obligations under the Payment Services Regulations 2017 (PSRs) within 15 days.
If there are exceptional circumstances, this is extended to a maximum of 35 days and the firm must send a holding letter in the meantime.