Each week I’m sent many complaints about banks refusing to refund unauthorised payments.The latest is from reader Edward who paid £45 to an independent online trader for an electric toothbrush that never turned up.When £45 more was taken from his card without permission he immediately told his bank, NatWest. He feared the trader was acting fraudulently and, sure enough, a further £29.99 came off his card three days later.But NatWest refuses to refund the money claiming Edward, of Hartlepool, Co Durham, had been negligent in using his card to pay the fraudulent trader on what was obviously was a fake website. This is a familiar story. It’s as if banks don’t know the rules or blatantly ignore them. Here’s what you and your bank need to know about unauthorised payments:
When money can be taken out of your bank account.
There are three circ*mstances when money can be taken out of your account – when you authorize a payment, via a court order, or when you owe the bank money and they invoke their ‘right of set-off’.
Unauthorised payments
If you did not authorise a particular payment you can claim a refund. In most cases, the bank must pay by the end of the business day after the day the problem came to light unless it has reasonable grounds for suspecting you have acted fraudulently.
The bank may ask you to answer questions and fill out a form confirming what has happened, but it cannot delay your refund awaiting its return.
The refund for an unauthorised payment must include any charges and interest you have paid because of the unauthorised transaction.
Incorrect payments
If you pay the wrong person, having used incorrect payment details, the bank holding that account must help with efforts to recover your cash. You may be able to take court action.
Refusing a refund
Your bank can refuse a refund for an unauthorised payment if they can prove you authorised the payment, you acted fraudulently in relation to the payment, were negligent in protecting access to your accounts or failed to notify the bank within 13 months of the unauthorised payment.
Dean Dunham – Sunday Mirror
For more information and tips about your consumer rights, please read ourother articles in the consumer news section.
FAQs
Banks must take your money to pay off debts with a court order. However, if you owe money to the bank, they can take legal action to recover the debt.
What to do if the bank won't give you your money back? ›
File banking and credit complaints with the Consumer Financial Protection Bureau. If contacting your bank directly does not help, visit the Consumer Financial Protection Bureau (CFPB) complaint page to: See which specific banking and credit services and products you can complain about through the CFPB.
Can banks refuse to give you your money? ›
Yes. Your bank may hold the funds according to its funds availability policy. Or it may have placed an exception hold on the deposit. If the bank has placed a hold on the deposit, the bank generally should provide you with […]
Do banks have to give your money back? ›
Once you notify your bank or credit union about an unauthorized transaction (that is, a charge or withdrawal you didn't make or allow), it generally has ten business days to investigate the issue. The bank or credit union must correct an error within one business day after determining that an error has occurred.
What happens if a bank gives you money by mistake? ›
If the bank deposited money to your account in error, it doesn't need your permission to remove those funds and deposit them into the correct account. The bank may also correct the error by exercising an offset, which allows a bank to charge the account for a debt owed to the bank.
How do I file a complaint against a bank with the FDIC? ›
You can submit your complaint or inquiry online at the FDIC Information and Support Center at https://ask.fdic.gov/fdicinformationandsupportcenter/s/. Alternatively, you can submit a complaint via mail to the Consumer Response Unit at 1100 Walnut Street, Box#11, Kansas City, MO 64106.
Who holds banks accountable? ›
The regulatory agencies primarily responsible for supervising the internal operations of commercial banks and administering the state and federal banking laws applicable to commercial banks in the United States include the Federal Reserve System, the Office of the Comptroller of the Currency (OCC), the FDIC and the ...
Can the bank ask why you are withdrawing money? ›
Do bank tellers have the authority to inquire about the purpose behind large cash withdrawals from customer accounts? Yes, bank tellers are allowed to ask why you are withdrawing a lot of cash from your account.
Can a bank refuse to give you an account? ›
Yes. Banks generally have discretion to determine to which parties and under what conditions they provide their products and services.
Can banks lock your money? ›
Yes. The bank may temporarily freeze your account to ensure that no funds are withdrawn before the error is corrected, as long as the amount of funds frozen does not exceed the amount of the deposit.
To request a refund of an unauthorised transaction:
Tell them that there is an unauthorised transaction on your account. Put a 'stop' on your account (for example, cancelling the card or disabling internet banking or online money transfers) to prevent more loss. Change any passwords that may have been compromised.
How do you get a bank to give you your money back? ›
Contact your bank and tell them it was an unauthorized debit or withdrawal. Ask them to reverse the transaction and give you your money back.
How can I get my money back from a bank? ›
Send a written refund request to your bank or credit card company. Tell them how you want the refund paid (e.g., cash, check, money order, or credited to a deposit account). Once the written request is received, the bank must refund the money within seven business days.
Can a bank take your money legally? ›
Yes, contrary to what you might think, a bank can take money out of your checking account, even if you don't authorize it. It's called a "right to offset" and it typically happens in one situation: When you owe your bank money on a loan.
