Being tricked into transferring money to a fraudster can feel like a uniquely isolating experience, but the law now provides significant protection to victims of these scams. In this guide, our fraud recovery specialist Thomas Blanchfield explains how impersonation scams work, what your bank must do to protect you, and the legal tools available to trace and recover stolen funds.

Spotting a scam: how this type of fraud unfolds

Over the years, we’ve seen a wide range of safe account and impersonation scams, from criminals impersonating customs officials to urgent requests to help out distant relatives. The specific tactics used change from case to case, but in our experience, most scams follow a recognisable pattern.

Claiming authority to build trust

The scam usually begins with a call, text, or email that appears to come from a trusted source – a bank, HMRC, the police, or a well-known company. Fraudsters can manipulate caller ID and email "from" fields to make the contact appear genuine.

Creating a sense of urgency

The scammer claims there's an urgent problem: suspicious activity on your account, an unpaid tax bill, or a compromised card. They create pressure to act immediately, often warning of serious consequences (frozen accounts, legal action, or further financial loss) if you don't comply straight away.

Presenting the solution

You're told the only way to resolve the issue is to move your money to a new "safe" account, pay a fee, or provide a passcode sent to your phone. In reality, the "safe account" belongs to the fraudster or an intermediary, and any passcode you share allows them to authorise further transactions.

Covering their tracks

Once received, stolen funds are typically moved through a chain of other accounts, often within hours, to make tracing more difficult. This is why speed of reporting is so critical.

What is your bank required to do to protect you?

UK banks and payment providers are subject to increasingly strict obligations to detect and prevent fraud, and to reimburse victims when things go wrong.

Mandatory APP fraud reimbursement

Since October 2024, banks operating over Faster Payments and CHAPS have been required to reimburse most victims of Authorised Push Payment fraud – previously reimbursement in these cases was at the bank’s discretion. The key facts to bear in mind are:

• Maximum reimbursement for Faster Payments claims: £85,000 per claim.
• Maximum claim excess: £100 per claim (does not apply to vulnerable consumers).
• Standard time limit for banks to reimburse: five business days.
• Time limit to submit a claim: 13 months from the final payment.

Fraud detection and intervention

Banks are required to actively monitor transactions for warning signs that they may be fraudulent, and advise customers or intervene when a transaction is flagged as suspicious. These warnings must be tailored to the specific customer and transaction. 

It’s not sufficient to send a generic warning with every transaction; warnings must be relevant to the specific customer, such as the transaction being unusually large, made to an account the customer has no transaction history with, or to a foreign bank or payment service that the customer hasn’t dealt with before. 

Shared liability between banks

Reimbursement isn’t solely the responsibility of the sending bank (the bank that the victim of a scam has an account with). Instead, the receiving bank (the bank the funds were transferred to) is obliged to pay 50% of the amount reimbursed to the sending bank. This ensures that all banks in the system are incentivised to work to reduce fraud. 

What legal tools help trace and recover stolen funds?

Where reimbursement isn't available, or where you're pursuing the fraudster or third parties directly, several legal tools can assist.

Freezing injunctions

Freezing injunctions are vital tools to prevent funds being moved on to other accounts, or spent, while an investigation is ongoing. As scammers will usually try to move any stolen funds through a chain of accounts as quickly as possible, freezing injunctions should be sought as soon as possible after fraud has been discovered.

Norwich Pharmacal and Bankers Trust orders

Norwich Pharmacal orders compel a third party – usually a bank – to disclose information that helps identify a fraudster or trace stolen assets. A Bankers Trust order focuses specifically on tracing and preserving assets. While both orders are used to obtain disclosure, a Bankers Trust Order is typically used to trace and preserve misappropriated assets rather than simply identify recipients.

Civil claims for recovery

Where funds have ended up with a third party, whether an accomplice or an innocent recipient, a civil claim (such as for money had and received, or unjust enrichment) may allow you to recover funds directly from whoever now holds them.

What is the Financial Ombudsman Service, and when should I use it?

The Financial Ombudsman Service is a free, independent service that resolves disputes between consumers and financial firms, including disputes about APP fraud reimbursement. If your bank rejects your claim, or offers less than you believe you're entitled to, you can refer the matter to the FOS. The Ombudsman can order your bank to pay compensation if it finds their handling of your case fell short of the required standard.

I think I’ve been targeted by a safe account scam. What should I do?

First of all, don’t panic. As we’ve discussed above, there are a number of legal protections in place for victims of this type of fraud, and multiple legal avenues available to recover stolen funds. What’s crucial is that you act quickly as soon as you realise a transfer you made was suspicious. Here’s a checklist in priority order.

• Stop all communication with the scammer, and make no further payments. It can be tempting to ask follow-up questions, request they reverse the transfer, or simply give them a piece of your mind. But that’s not going to help you recover your money – your efforts are best focused elsewhere.
• Report the fraud (or suspected fraud) to your bank immediately. Make sure that you contact them using a verifiable phone number – use one printed on a bank statement or your bank card. Inform them you want to raise an APP fraud claim, ask for a same-day recall attempt on the payment and request that any linked accounts or cards are frozen.
• Report the incident to Action Fraud (in England or Wales) or the police (in Scotland) to create an official record of the crime and obtain a Crime Reference number. This will be necessary for making a request for reimbursement or pursuing a civil claim through the courts if that turns out to be necessary.
• Preserve all evidence related to the scam. Keep copies of messages, emails, call logs, screenshots, and bank statements showing the relevant transfers. Don’t edit or delete anything relating to the incident. 
• Seek legal advice promptly. Speak to Complex Law – we can quickly assess whether court orders, complaints, or civil claims are appropriate, and can act quickly to trace funds before they're moved further.

What does UK law say about impersonation and APP fraud?

APP fraud reimbursement in the UK is governed by rules made under the Financial Services and Markets Act 2023, which empowered the Payment Systems Regulator to introduce mandatory reimbursement for the majority of APP fraud victims. 

These rules apply to payments made over Faster Payments and CHAPS from 7 October 2024 onwards. Separately, victims may have civil law remedies against fraudsters or third parties who receive stolen funds, and can apply to the courts for disclosure and freezing orders to assist with tracing and recovery.

Need advice on dealing with a "safe account" or impersonation scam? Contact Complex Law.

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