Bank account frozen for two months after fraud

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No-one wants to be the victim of bank fraud. But if it happens, you want your bank to act swiftly and to sort it all out. But one SavvyWoman user found her bank left her without access to her account for two months.

A sophisticated fraud

A couple of weeks ago I was contacted by a SavvyWoman user called Andrea. She was – frankly – at her wit’s end because her bank, Barclays, had frozen her account after she was a victim of a sophisticated fraud.  The fraud happened when Andrea took a short trip to Germany in April. She’d told Barclays her plans before she travelled, so her transactions there wouldn’t get flagged as fraud.

While she was in Germany, she had a call from her usual Barclays number, from a member of Barclays fraud team called ‘Dan’. He called to say there was some unusual activity on her account. Her card was being used to take out cash in Scotland – and could she confirm it was her? Well, it wasn’t. She confirmed that she was in Germany and ‘Dan’ said it must be a fraudster at work.

Andrea had spoken to someone called Dan at Barclays the week before, so it made sense that he was calling her now. ‘Dan’ told her to move £999 to a new account and that her online banking would stop working afterwards. She wouldn’t be able to use her debit card, but she’d be sent a new one. Andrea had, unfortunately, been on the receiving end of scam calls from Nigeria in the past and, when she’d reported it to Barclays, she’d received a new debit card. So, this tallied with what she’d been told before.

When Andrea got back to the UK, there was no new bank card. So Andrea went to her local Barclays branch, only to be told that the call wasn’t from Barclays at all, and she’d been the victim of a fraudulent piggyback call. The fraudster had ‘spoofed’ Barclays number, so it looked like the call came from the bank. I’ve seen screenshots from Andrea’s phone, and it shows the call as coming from Barclays.

Andrea was told the fraud department would investigate and that they would try and get her money back. The bank hoped to get it sorted within 21 days. Andrea also had £539 taken from her Barclaycard, but that was refunded pretty much straight away.

Bank account frozen

In the meantime, Andrea’s bank account was frozen and she had no online access.  And, despite Andrea getting in touch with the bank regularly, almost two months later (52 days), her bank account was still frozen. It meant she couldn’t pay for things and she had no idea whether or not the £999 would be refunded. Worse still, she was being charged £1.50 a day because she’d gone overdrawn.

In despair, she contacted me. I must confess that I was horrified by what had happened and how Barclays had treated Andrea. There are strict rules about what banks should do, including how quickly they should sort out any problems and they clearly weren’t being followed.

The financial regulator, the Financial Conduct Authority, says that banks should refund any unauthorised payments within a few days. The only exception is if it has reasonable grounds for suspecting that you acted fraudulently.

Barclays refund

After I got involved, Barclays did act quickly to sort out the problem. It refunded the £999 and the charges of £94 it had taken from Andrea. It also paid Andrea £500 for distress and inconvenience. In a statement, a spokesperson for Barclays told me: “It is evident that on this occasion we have failed to meet the high standards that our customers can rightly expect to receive. Whilst this has been a complex case, we recognise that it could have been resolved sooner and so have apologised to our customer and offered her £500 for the distress caused.  We can also confirm that the £999 that was lost as a result of a scam, and the charges have also been returned.”

So, a great result for Andrea, who’s naturally delighted. But she and I share the view that it shouldn’t take the intervention of someone like me before Barclays does the right thing. Barclays is not the only bank that’s treated its customers like this from time to time. The Financial Ombudsman Service, which is the free-to-use complaints service about financial products, received over 12,000 complaints about fraud and scams from bank customers last year – a 43% increase on the previous year.

What banks should do

Last year, the Financial Ombudsman Service published a report into fraud and scams (which you can read here). One of the things highlighted by the chief ombudsman, Caroline Wayman, was that banks were sometimes calling customers who’ve been defrauded ‘grossly negligent’, when they haven’t. Barclays hadn’t said Andrea was grossly negligent as they hadn’t actually reached a conclusion on her case.

SAVVY TIP: If a customer is grossly negligent, it means the bank isn’t liable to refund money that’s been stolen.

The Financial Ombudsman Service looks at complaints individually, but it does have some general guidelines on how it approaches bank fraud. This is they told me about their general approach:

  • Unauthorised payments: if a payment out of someone’s account is unauthorised, the starting position is that the bank/building society is liable. The only circumstances where a customer would become liable for an unauthorised payment is where they have failed with ‘intent or gross negligence’ to comply with their obligations as a payment service user. In the case of fraud, that means failing to take what’s called ‘all reasonable steps’ to keep security information safe.
  • Gross negligence:  The Financial Ombudsman Service is unlikely to say that a payment service user has failed with intent or gross negligence if they’ve shared personal information whilst under the spell of a convincing and sophisticated scam. The ombudsman will look at each case individually, though and there may be cases where it thinks you didn’t take ‘all reasonable steps’ to keep your details safe.
  • Banks must show you were negligent: If the bank claims that a customer was grossly negligent, the Financial Ombudsman Service would expect them to provide evidence to support their claim.

Related articles: 

Bank fraud refund scheme for scam victims comes into force

Bank frauds and scams to avoid – how to reduce the risks of being a fraud victim

Banks’ limits on paying new and existing payees via mobile and online banking

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