One in five ID fraud victims not reimbursed
25 June 2009
Most victims of financial fraud get their money back, but new research from Which?* has found that one in five victims has not got the full amount back and in some cases their bank has refused to reimburse them at all.
According to the Which? survey, one in four people in Britain has been a target of financial fraud. People who have their identity stolen should get their money back unless their bank can prove they acted fraudulently or without reasonable care**.
When Which? member Iain Richardson had more than £2,000 stolen within 20 minutes of having his debit card stolen, Natwest turned down his fraud claim because his Pin was used to withdraw the cash. It said he must have been negligent, and when he appealed to the Financial Ombudsman Service (FOS) it also turned down his case***.
Chip and Pin is the most secure method of payment, but Which? says that a fraudster can discover and use someone’s Pin by looking over their shoulder at a cashpoint before stealing the card, and is calling on the Financial Services Authority (FSA) to provide more detailed guidance on the evidence banks have to give in card fraud cases****.
Earlier this month, a judge ruled against a Halifax customer who wanted compensation for money taken from his account, because his Pin number had been used.
Card fraud at cash machines increased by 31% between 2007 and 2008, and around £609.9m was lost through card fraud last year.
Martyn Hocking, Editor, Which?, says:
“Financial fraud is inconvenient and stressful, and can also be costly if you’re unable to recover your losses. Fraudsters can be extremely clever and may need just a few details to access your accounts, but you can significantly reduce the risk of fraud if you’re vigilant. Most of us know that we shouldn’t write down our Pin, but we should also shred bank statements, be cautious about the passwords we use and think twice before posting personal details online.”
Tips and a video guide to beating ID fraud are at www.which.co.uk/identityfraud.
- Ends –
Notes to Editor
The article “Beat the ID fraudsters” appears in the July 2009 issue of Which? magazine. For further information, the full article, a copy of the magazine or an interview, please contact Nicola Frame.
* Which? surveyed 1,038 members of the public, representative of the GB population, online in May 2009.
** Under clause 12.12 of the Banking Code. Not taking reasonable care might include writing down or disclosing your personal identification number (Pin).
*** People should make a formal complaint to their bank in the first instance. If they’re not happy with the bank’s response they can complain to the Financial Ombudsman Service (FOS)free of charge. If FOS rejects the complaint, they can take the matter to court but they may have to pay for this course of action so should seek advice first.
**** When the Financial Services Authority (FSA) takes over retail banking regulation this November, Which? expects it to provide more detailed guidance on the evidence that should be provided by banks in card fraud cases. Which? will be making representations to the FSA as it develops its new role in the coming months, ensuring that the process is both fair and fully transparent for consumers.