Victims of card fraud: will your bank treat you fairly?

The Financial Conduct Authority has revealed the results of an investigation into how victims of card fraud are treated by their banks. They raised a number of concerns about the rules, the level of understanding from customers, and the difficulties some customers faced in getting their money repaid. However, they don't plan to do anything about it.

The FCA raised the issue back in March 2014, when they said that victims may be unfairly denied refunds, and launched an investigation to see whether the situation was bad enough to require intervention. In the end they decided banks are doing a good enough job to be left alone. However, they highlighted a number of problems.

They looked into the steps banks take when there are 'unauthorised' transactions on current accounts and credit cards. This can be anything from an account transfer to an ATM withdrawal or a card transaction that the account holder was unaware of. They wanted to be sure that people got the refunds they were entitled to - and that banks were not unfairly rejecting claims.

The good news was that firms are largely delivering on the safeguards the law requires them to offer. This includes things like refunding unauthorised payments immediately unless there is evidence of a reason to refuse a refund. It added: "Firms tend to err on the side of the customer when reviewing claims."
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The bad news

However, it also outlined areas where customers are coming up against serious issues. The first is that not all the terms and conditions attached to financial products are fair, and some make it hard for people to adhere to all the security provisions they are expected to make.

In addition, they discovered that customers aren't wading through these terms and conditions, so they aren't aware of the steps they need to take in order to be covered against fraud. One particular issue was that people struggled to remember all the PINs and passwords they were expected to use, and as a result many were writing them down or sharing them. The problem is that this is precisely the sort of thing that can mean they are not entitled to a refund if they are a victim of fraud.

On the positive side, most banks were not rigorously enforcing the harshest rules in their terms and conditions, but the risk still remains that they could alter this policy in future, and start refusing claims on this basis.

Finally, the FCA pointed out that in some instances the claims process was arduous. It said: "The claims experience varied from instant satisfaction to drawn out, frustrating experiences." It highlighted that customers could be left waiting months for a decision, and having to chase the bank for an answer. It meant that even when they eventually got their money back, many of them were left angry and disappointed at how their bank had handled the matter.

But what do you think? Have you been a victim of fraud? And were you happy with how your bank handled it? Let us know in the comments.

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