Why you may not be refunded for bank fraud

Stolen cardsChris Young/PA Archive/Press Association Images

A number of banks are changing their small print next year, which could mean that if you are a victim of fraud, they will refuse to refund the cash.

So how are the rules changing, who does it affect and what can you do?
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The changes

At the moment, when you face the shock and upset of a bank fraud, at least in the vast majority of cases you know that at least you won't end up out of pocket. However, all that could change soon.

The pioneer of this change is Santander. According to a report in the Daily Mail, the bank will be changing the small print in January to outline a number of instances in which the customer will be considered at fault - and the money not returned.

These include using a PIN that can be easily guessed by someone who gets their hands on your card. This may mean you have chosen a sequence of numbers that is too easy to guess (such as your birthday) or that you have used the same digits for a number of PINs - which has enabled someone to access your PIN.

Alternatively, if they view CCTV of you using a cashpoint, and decide that you have failed to hide your number from other people in the area, they could conclude that subsequent fraud was your fault.

The newspaper said that the new rules will even cover mobile phones which use banking apps, or otherwise provide access to your account. If your handset is stolen and you haven't protected it with a PIN, you could be found liable for any subsequent loss.

It added that HSBC had already made a number of these changes, and that it expected the rest of the industry to follow suit.

Watch: Good and bad ATM etiquette

What can you do?

The sums lost through card fraud are astronomical. According to The UK Cards Association, total fraud losses on UK cards totalled £185.0 million between January and June 2012 - including £14.6 million in cash machine fraud and £20.2 million in fraud on lost or stolen cards. The banks seem to be doing their bit to shake off as much responsibility for this fraud as possible.

It means we need to be especially careful of our cards. With technology such as chip and PIN helping to deter fraud, criminals have turned their attention to more straightforward ways of getting hold of people's cards and PINs. This includes distracting people in shops or at cash machines and then stealing their cards without them noticing.

DCI David Carter, Head of the Dedicated Cheque and Plastic Crime Unit (DCPCU), the special police squad which is sponsored by the banking industry says: "Given the rise in old fashioned crimes - criminals using distraction techniques and duping people into disclosing their passwords and online banking details - we are urging everyone to be on their guard and work with us to help stop this criminal activity."

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Why you may not be refunded for bank fraud

More than 46,000 of 106,000 the complaints received by the FOS in the second half of last year related to payment protection insurance (PPI). And the organisation is expecting to receive a record 165,000 PPI complaints in 2012/2013.

The huge numbers are due to the PPI mis-selling scandal that should now be a thing of the past, but there is no doubt that the insurance, which can add thousands to the cost of a loan, is highly unpopular!

(Pictured: Martin Lewis after the PPI payout ruling)

Complaints about mortgages jumped by 38% in the last six months of last year, the FOS figures show, compared to an increase of just 5% in investment-related complaints.

Common gripes about mortgages include the exit penalties imposed should you want to sell up or change you mortgage before a fixed or discounted deal comes to an end, and the high arrangement fees charged by many lenders.

While there is nothing in the data released by the FOS about the number of complaints relating to savings accounts, hard-pressed savers have been struggling with low interest rates for several years now.

You can get up to 3.10% with Santander's easy-access eSaver account, but many older accounts are paying 1.00% or less and even this market-leading offer includes a 12-month bonus of 2.60% - meaning that the rate will plummet to just 0.50% after the first year.

Banks are imposing the highest authorised overdraft interest rates since records began, with today's borrowers paying an average of 19.47%, according to the Bank of England.

A typical Briton with an overdraft of £1,000 is therefore forking out around £200 in interest charges alone. Coupled with meagre returns on savings, it's enough to make your blood boil!

While authorised overdrafts may seem expensive, going into the red without permission will cost you even more due to huge penalty fees.

Barclays, for example, charges £8 (up to a maximum of £40 a day) each time that there is not enough money in your account to cover a payment.

If you need to send money abroad, the likelihood is that your bank will impose transfer charges - and offer you a poor rate of exchange. Someone transferring a five-figure sum could easily lose out by £500 or more as a result.

The good news, however, is that you can often get a better deal by using a currency specialist such as Moneycorp.

Automated telephone banking systems, not to mention call centres in far-flung parts of the world, are one of our top gripes - especially as we often encounter them when we are already calling to report a problem.

In the words of one disgruntled customer: "What is it about telephone banking that turns me into Victor Meldrew? Well, maybe it's the fourteen security questions, maybe it's the range of products that they try to push or maybe it's because I'm forced to listen to jazz funk at full volume while my phone bill soars.

"Actually though, I think it's because the people I eventually speak to rarely seem able to solve the issue I'm calling about."

The days of a personal relationship with your bank manager are long gone - for the huge majority of us at least.

When ethical Triodos Bank investigated recently why around 9 million Britons would not recommend their banks to a friend or relative, it found that almost a third felt they were not treated as individuals. Another 40%, meanwhile, were simply disappointed with the customer service they received.

When you're in a rush, the last thing you want to do is wait in a long queue at your local branch.

Researchers at consumer champion Which? recently found that most people get seen within 12 minutes, but you could have a much longer wait if you go in at a busy time. Frustrating stuff!

The Triodos Bank research also indicated that the bonus culture that ensured the bank's high-flying employees received large salaries, even when it was making a loss at the taxpayer's expense, was hugely unpopular with consumers.

About a quarter of those who would not recommend their current banks said this was the main reason why. And with RBS executives sharing a £785 million bonus pool despite the bank, which is 82% publicly owned, making a loss of £2 billion last year, it's not hard to see why.

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