Falling victim to a scam can be devastating, both financially and emotionally. Fraudsters are becoming increasingly sophisticated, often tricking people into transferring money directly to them through convincing phone calls, emails, or text messages. While many people blame themselves, the truth is that scams are designed to exploit trust and pressure victims into making quick decisions. Importantly, in some cases, banks can be held responsible for failing to protect their customers from fraud.
What is the impact on victims?
Victims of scams often lose life savings, inheritances, or essential funds intended for house purchases or business investments. The financial consequences can be devastating, but the emotional impact is equally severe, with many people experiencing stress, anxiety, and a lasting sense of betrayal. Pursuing a complaint or claim against a bank can provide not only financial redress but also a sense of justice.
What duty of care do banks have?
Banks have a duty to take reasonable steps to protect their customers against financial crime. This includes monitoring transactions, spotting unusual activity, and taking action if there are signs of fraud. For example, if a customer suddenly transfers a large sum of money to an unfamiliar account, the bank should question whether the payment is genuine. Where a bank fails to intervene and allows a scam to proceed unchecked, you may be entitled to claim compensation for your losses.
What types of scams fall under this?
One common type of fraud is authorised push payment (APP) fraud, where victims are tricked into transferring money by scammers posing as HMRC, utilities companies or other trusted organisations, believing the payment is legitimate. There are also “romance” scams, where people are convinced to make large transfers to people they have met online, believing they are helping someone with whom they’re in a genuine relationship.
Industry codes and regulations, such as the Contingent Reimbursement Model (CRM) Code, set standards for how banks should respond in these types of situations. Although the payment is “authorised” by the customer, banks are increasingly being held accountable if they fail to detect warning signs or fail to follow proper procedures.
If my bank failed to protect me from a scam, what should I do?
If you believe your bank failed to protect you, it is essential to act quickly. Complaints can be made directly to the bank in the first instance, but if they refuse to accept responsibility, the matter can often be escalated to the Financial Ombudsman Service or pursued through the courts. Time limits apply, so early advice is essential.
At Complex Law, we assist clients who have lost money through scams and fraud, helping them to recover compensation from banks that failed in their duty of care. We understand the sensitive nature of these cases and the distress they cause, and we are committed to fighting for fair outcomes. If you have been the victim of a scam, do not assume that nothing can be done. Contact our team today to discuss your options and find out whether you may have a claim against your bank.
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