How to beat identity fraud Card fraud

Banks have refused refunds for cash machine fraud using the correct Pin

If your card is stolen and money is taken from your account using the correct Pin at a cash machine, you may have been 'shoulder surfed'. 

Under the banking rules your bank should refund your money as long as you have not acted fraudulently or negligently.

But there have been a number of cases where money was taken this way but the victim's card was not stolen. 

As a result, banks have refused to refund the money, saying the victim must have let someone else use their card and told them their Pin.

FSA rules protect customers

But card fraud victims may now get more protection if money is taken from their account by someone using the correct Pin via a cash machine - even if the card was not stolen. 

It's harder than it used to be for banks to refuse refunds in these situations. The Financial Services Authority (FSA) says that banks must immediately refund any money a customer claims was taken fraudulently unless the bank can give a good reason why it needs to investigate further.

There are also clearer rules about what evidence a bank must provide to show that it is not liable for the fraud. It must show that the transaction involved the customer’s actual card as well as the Pin and was accurately recorded by the cash machine and not affected by any technical problems with the cash machine.

Choose the best credit card for you with more than 200 cards compared.

Contact your bank

If you have a dispute with your bank over an unauthorised cash machine transaction, use the template letter below to write to your bank telling it what evidence you might rely on to prove whether your card was used or not to discourage the bank from destroying it. 

You should send this after your bank has refused to refund the money but before you complain to the Financial Ombudsman Service or go to court.

• How to find the best credit card - get the best card for you
•  How to bank safely online -  read our top tips
• Find the right bank account - check out our guide