Your rights for common banking problems
Money taken from your account that you didn’t authorise? The wrong amount debited? Find out your rights and how to use them for some common banking complaints.
Here we answer some frequently asked questions about common banking problems:
What should I do about a payment from my account that I didn’t authorise?
Your bank must refund an unauthorised transaction. Money can only be taken from your account if you have authorised the transaction or your bank can prove you were at fault.
Contact your bank immediately if you notice a payment out of your account that you did not authorise. If you are sure that you did not authorise the payment you can claim a refund.
However, your bank does not have to refund you if you do not tell it about the payment until 13 months or more after the date it left your account.
Find out more about how to use this guide.
Know your rights!
If your bank has to refund the amount of an unauthorised transaction, it must also refund any charges or interest you have to pay because of the unauthorised transaction.
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Why won’t my bank refund me?
Your bank must only refuse a refund for an unauthorised transaction 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; or
- 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.
How quickly must my bank refund me for an unauthorised transaction?
The bank must make the refund immediately unless it has evidence that one of the above reasons applies.
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. If the bank has evidence that one of the above reasons for refusing a refund applies, it may investigate before making a refund but must look into it as quickly as possible.
If your bank rejects your claim for a refund it should explain why.
If the transaction was on a credit card, the refund may not happen immediately. But the card issuer cannot charge interest or ask for repayment of the amount unless it can prove that you are liable to pay.
Know your responsibilities!
When you receive a debit or credit card, or sign up for internet or telephone banking, you should be told what you have to do to keep your details secure.
It is important that you protect the personal information on how 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.
Deliberately making a false claim that a transaction is unauthorised is fraud and your bank is entitled to report such claims to the police.
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Can my bank make me pay for being careless with my details?
You may be liable up to a limit of £50 if your card has been lost or stolen or your bank can show that you have failed to keep the details of your password or PIN safe.
If your bank can show you have been ‘grossly negligent’, you will be liable for the whole amount.
You will not be liable, however, for any unauthorised transactions after you have notified the bank or card issuer of the loss, theft or unauthorised use of your card or password – unless it can prove that you acted fraudulently.
Find out more about how to use this guide.
Identity theft protection – know your rights!
When your bank sends you a new bank card, you may be asked to call a telephone number to activate the card. This is a security step to ensure the card is in your possession before it can be used.
Your bank may offer you identity theft protection during the call, for an additional fee. While this may be appropriate for some people, do remember that, in certain circumstances, you are entitled to an immediate refund if there is a fraudulent transaction on your account.
If you decide you want identity theft insurance, you should shop around to make sure you get the best deal.
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A payment has been made to the wrong account, what should I do?
Payments are made in the UK using a sort code and account number.
If you provide the wrong sort code or account number, your bank must make a reasonable effort to recover the money (and may a charge for doing so). However, it will not be liable for any losses you suffer.
If your bank made the mistake and sent money to the wrong account it must refund the amount of the payment to your account plus any charges or interest you pay as a result.
Why is my bank refusing to make a payment?
Your bank can only refuse to make a payment if:
- you do not have enough funds available in the account;
- you have broken the agreed terms and conditions, such as needing to provide two signatures for a joint account payment; or
- making the payment would be unlawful.
If your bank refuses to make a payment (such as by ‘bouncing’ a direct debit) it must generally tell you at the earliest opportunity that it is doing so and, if possible, explain why.
The bank can charge for not making a payment if the refusal is reasonably justified.
Find out more about how to use this guide.
Help! My bank has paid out the wrong amount
If your bank sends more or less money than you asked it to, it must correct the error and refund you for any charges or interest you have paid as a result of its mistake.
Make sure you provide evidence of the charges and interest you paid as a result of the error.
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The wrong amount has been debited from my account – what should I do?
In some situations, such as when booking a hotel room or hiring a car, you may be asked to provide your card details without agreeing the amount to be debited.
If the amount eventually charged is more than you could reasonably have expected to pay then your bank must refund you the entire amount or tell you its reasons for not doing so.
If you wish to claim a refund, you must contact your bank or building society within eight weeks of the amount being taken from your account.
If the bank does refund you it will reclaim the money from the company that charged you. That company is likely to ask you for payment in some other way.
Why else would my bank take money out of my account?
In certain circumstances, your bank can claim money from one account to pay off a separate 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 use set-off on your account, it should:
- provide you with information about its right of set-off at least 14 days before the first time it tries to use it, and where appropriate on any further occasion;
- estimate how much money needs to be left to meet your priority debts and essential living expenses like mortgage, rent and food bills;
- provide a refund, in most cases, if it becomes apparent to the bank 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; and
- tell you promptly after set-off has been used on your account.
It should explain this in your account terms and conditions.
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Find out more about how to use this guide.
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