Unauthorised payments from your account (2024)

Find out more about claiming a refund, why a refund might be refused, and what to do if you’ve been tricked into making a payment to a scam account.

First published: 18/04/2016 Last updated: 20/03/2023 See all updates

Claiming a refund

If you didn’t authorise a payment, you should ask your bank for a refund. This refund should be in your account by the end of the next business day, along with any charges and interest you paid because of the transaction.

When you make your claim, your bank may ask you some questions and get you to fill out a form stating what happened. But it can’t delay your refund while it waits for you to return the form.

Deliberately making a false claim for a refund is fraud, and your bank could report it to the police.

Why a refund can be refused

Your bank can only refuse to refund an unauthorised payment if:

it can prove you authorised the payment
it can prove you acted fraudulently
it can prove you deliberately, or with 'gross negligence', failed to protect the details of your card, PIN or password in a way that allowed the payment
you only told your bank about the unauthorised payment 13 months (or more) after the date it left your account

If the unauthorised payment was from an overdrawn current account or a credit card payment, your bank can only refuse a refund if:

it can prove you, or someone acting on your behalf, authorised the payment
the loss was due to the use of a payment card (including a virtual card)by someone who had it with your consent

In all cases, banks can’t simply say that the use of your password, card or PIN proves you authorised a payment.

Authorised push payment (APP) fraud 

It’s important you get in touch with your bank or provider as soon as possible if you think you’ve been scammed.

APP fraud is when a fraudster tricks you into making a payment to an account controlled by them.

This is different from other kinds of scams, for example, when a fraudster steals money from your account without you knowing. With APP fraud, you authorise the payment under false pretences.

If your bank or provider has signed up to the code of practice for APP scams, you can expect to get your money back if you weren’t to blame for the success of the scam.

You can find a list of firms signed up to The Contingent Reimbursem*nt Model Code (CRM Code) on the Lending Standards Board website.

Protect yourself from unauthorised transactions

When you get a debit or credit card, or sign up for online, telephone or mobile banking, you should be told how to keep your details safe.

Never share your bank account or credit card details unless you’re certain who you’re dealing with. If you’ve already given fraudsters this information, tell your bank immediately using the contact details on the Financial Services Register. 

Your bank or card issuer will also tell you how to get in touch if your card is lost or stolen, or if you think someone else knows your password or PIN.

Find out more about how to protect yourself from scams and how to report a scam.

When banks can claim your money

Your bank may be able to claim money from one of your accounts to pay your debt in another account. This is known as the right to set-off.

This could happen if you miss a loan or credit card payment and you also have a current or savings account with the bank.

If a bank wants to claim money from your account to pay a debt, it should:

tell you about its right to set-off at least 14 days before it's used on your account and, when appropriate, on any other occasions
estimate how much money needs to be left in your account to meet your priority debts and essential living expenses like your mortgage, rent and food bills
refund you, in most cases, if the bank later realises that money taken in set-off was intended for those priority debts or essential living expenses
not use set-off on money it knows is intended for certain purposes, such as where the NHS provided it for healthcare, or a third party is entitled to the money
tell you quickly when set-off has been used on your account

The right to claim money from your account to pay a debt should also be clearly explained in your account’s terms and conditions.

Page updates

20/03/2023: Editorial amendment Page update as part of the website refresh

19/08/2021: Information changed Money Advice Service to MoneyHelper

19/03/2021: Editorial amendment General page updates.

More on payments

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Using payment service providers

Account information and payment initiation services

Banking and online account scams

Your rights with financial services

As an expert in financial transactions and consumer protection, I can confidently provide insights into the key concepts outlined in the article regarding claiming a refund, reasons for refund refusal, authorized push payment (APP) fraud, protecting oneself from unauthorized transactions, and when banks can claim your money.

Claiming a Refund: If you notice an unauthorized payment from your bank account, it is crucial to contact your bank immediately. In most cases, money can only be taken from your account if you've authorized the transaction. Upon reporting the unauthorized payment, you won't be held responsible for subsequent unauthorized payments unless there's evidence of fraudulent activity on your part.

Why a Refund Can be Refused: Refunds for unauthorized payments may be refused by the bank under specific conditions, such as if the bank can prove you authorized the payment, you acted fraudulently, you failed to protect your card details with gross negligence, or you reported the unauthorized payment more than 13 months after it occurred. Different conditions apply if the payment was from an overdrawn current account or a credit card payment.

Authorized Push Payment (APP) Fraud: APP fraud occurs when a fraudster tricks you into making a payment to an account they control by gaining your authorization under false pretenses. If your bank follows the code of practice for APP scams, you can expect reimbursem*nt if you were not at fault for the scam. A list of firms adhering to The Contingent Reimbursem*nt Model Code (CRM Code) can be found on the Lending Standards Board website.

Protecting Yourself from Unauthorized Transactions: To safeguard against unauthorized transactions, it's essential to keep your bank details secure. Never share your account or credit card details unless you are certain of the entity you're dealing with. If you suspect fraud, contact your bank immediately using the provided contact details. Banks also provide guidance on reporting lost or stolen cards and handling compromised passwords or PINs.

When Banks Can Claim Your Money: Banks may have the right to claim money from one of your accounts to pay off debts in another account, known as the right to set-off. This typically occurs when you miss a loan or credit card payment while having other accounts with the same bank. The bank must notify you at least 14 days before using the right to set-off and should estimate the amount required to meet priority debts and essential living expenses.

In conclusion, staying informed about these concepts is crucial for consumers to navigate the complexities of financial transactions and protect themselves from fraud and unauthorized activities. If you have further questions or concerns, feel free to ask for more detailed information.