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Banks not liable in most phone scam cases

'Vishing' victims won't always be compensated by their bank


A study into phone scams has found that in almost two thirds of cases, banks weren’t responsible for compensating victims for their losses.

The Financial Ombudsman Service (FOS) reviewed 185 phone scam cases and found that one in five people had lost between £20,000 and £49,999 with some losing more than £100,000.

It ruled that the bank was liable for those losses in 37% of cases, leaving 63% of consumers without compensation, having given their own money away.

The FOS said that banks have a duty to act on their customer’s instructions – so if you transfer or withdraw money yourself during a scam you’re unlikely to get it back.

Don’t risk losing your hard earned cash – we’ve created a guide you can use to spot and avoid phone scams.

Over 55s vulnerable

The FOS found that four out of five of those conned out of their cash were aged over 55. One in five were over 75 years old.

The cases involved two popular scam tactics: ‘vishing’ and ‘no hang up’ frauds.

Vishing scams involve criminals tricking people out of their savings by pretending to be from a legitimate body such as their bank or the police.

No hang up scams involve fraudsters trying to encourage you to hang up and call your bank to verify the legitimacy of the call. But the phone line can stay open for up to two minutes, so the fraudsters remain on the line and play a dialling tone to trick you into thinking you’re calling your bank when you’re still talking to them.

Avoid phone scams

Which? executive director Richard Lloyd said: ‘It is critical that banks act swiftly to help victims of scams and provide them with accurate information on their rights.

‘With scams becoming much harder to spot and fraudsters using aggressive tactics to hook their victims, the old adage still stands – if something sounds too good to be true, it probably is.

‘Our advice to consumers is to always check who you are dealing with before you hand over any cash and don’t respond to unsolicited calls, texts or emails.’

Here are five key tips to avoid phone scams:

  • You should never give out personal or banking information when answering an incoming call or rely on the caller ID for identification.
  • If you have any doubts you should hang up and preferably use a different phone, or wait five minutes to call a trusted number.
  • Banks will never ask you for your full pin number or ask you to key your pin into the phone keypad. They will never send someone to your home to collect your bank card.
  • Banks will never ask you to send personal banking information via email or text.
  • Banks will never ask you to authorise a transfer of money to a new account, or hand over cash on an unsolicited call.

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