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Should Banks Compensate Scam Victims?

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barry1010 | 11:49 Tue 07th Nov 2023 | Business & Finance
21 Answers

I really do feel for people who have been scammed out of money but I don't understand why banks have to refund the money.

I pay my window cleaner a modest amount by bank transfer every month - same person, same amount, and have to tick several boxes before the payment goes through, as well as read a warning about scams.

I have read of banks making it very difficult for a customer to withdraw their money and even telling them they are being scammed - but still have to refund.

If I get scammed out of the cash in my pocket it is gone forever.

Would a bank be within its rights to close a scam victim's bank account after being refunded?  

This could be a very clever con, too.  A person claims to have been scammed - the money has left their account - and gets a refund but also pockets the scam money. 

What are your thoughts?



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I kinda agree with you.

For example my MIL keeps taking out insurances - then claims she is scammed because she doesn't remember taking them out and gets full refunds to the detriment of the companies.

Also - when she has been 'scammed' she has willingly given over her card details - so why when she discovers this a day or two later from her bank account why does she get a full refund.

Its different - if your card is cloned or physically stolen and then used .

There is a thread on here ages ago where I explained how my Son and DiL were scammed out of a few thousand £s.  A guy from abroad somewhere wanted to hire their holiday cottage for a week or two for about let's say £1k. He said his boss was paying for it and had given him a cheque for £5k but that £5k was for everything else as well that he would need during that time. So he asked if he could send them the £5k and would they put £4k back into his account.  Son said yes DiL said no as she was suspicious but they did it anyway.  Then the £5k cheque bounced.  Bank refused to pay them.  Someone very helpful on here plus S & Dil's ex Bank Manager neighbour said that IF the bank had paid out the £4k BEFORE the £5k cheque had cleared then the bank was at fault UNLESS they had £4k already in their account.  They hadn't so the bank lost the case.

Perhaps banks ought to use a sliding scale of culpability on the part of the account holders and deduct money from any compensation as applicable.

For instance, in LB's son's case, he was partly to blame for entering into the arrangement without first ensuring he would only send the money 'after' the cheque had cleared. Son should have listened to his missus. 

Agreed, the bank also ought not to have sent the £4k without the cheque first clearing and the couple not having the funds in their account to cover the amount.

Pleased they got a full refund but we should all be more careful and vigilant when it comes to paring with our hard-earned.



Ken //For instance, in LB's son's case, he was partly to blame for entering into the arrangement without first ensuring he would only send the money 'after' the cheque had cleared. Son should have listened to his missus.\\

Oh boy Ken he knows that now, he got reminded every day for weeks/months afterwards.  They're divorced now perhaps that had something to do with it.

In some circumstances yes. It used to be the case that you cannot con an honest man. That is no longer the case, if the person has taken all realistic precautions and they are still scammed then the banks should compensate. Usually though the person is at least guilty of doing something they are advised not to do.

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The scammed have ignored the scam warnings that pop up when they attempt to make the payment, in some cases have lied to make the payment go through.

Just how is a bank supposed to prevent this happening?  

wasnt there a case a few years ago where a married couple were scammed of a considerable amount of money - tried to get the bank to repay it.

the bank argued that they lied as they ticked the box saying the knew th payee when they didn't

I don't think they got their money back


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Probably, Helen, there are cases where the banks have refused to pay up - they often change their mind if the media get involved though.

but I don't think they should be made to change their mind.

if you don't abide and tell the truth to the bank you should forfeit the right to reclaim that money

I agree, you should tell the truth.  Why wouldn't you?

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Ladybirder, I can think of one scam where the customer would lie.  When they believe they have been contacted by the internal fraud department of their bank and told somebody within the bank is stealing money and they need to transfer their money to another account.  They are told to lie to the bank so as not to warn the thief

Apparently this had happened a few times 



Fick is as fick does.

If someone phones you saying they are the Bank then you ask for their name and tell them you will ring them back.  If genuine the Bank are very happy to do this as I found out when someone in India stole my new debit card (they got nothing).

These days Banks do ask a lot of questions, but some people just ignore them or dont read them properly, so no the Banks should not compensate stupidity or arrogence.

Also I dont under stand why people dont verify the account first.  I always send £1.00 and wait on confirmation of the payment from the recipient. Scammers I would imagine would be put of slightly by this as you now have made them wait and have details that Banks could pick up (They do track payments).  You can never be 100% but many scams could be prevented with just a little care.

"I always send £1.00 and wait on confirmation of the payment from the recipient."


If the scammer confirms receipt of the £1, how does that help?

Well there have been enough warnings in the newspapers, by the banks themselves and on the Martin Lewis show to educate people about this.  There must be some incredibly stupid people about.

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Corby, I phone the person/company and ask them to confirm they have received the £1.

I do that with every new payee as I worry about inputting the wrong digit.

Remember the biggest scam of all time - the banks lent billions to sub-prime borrowers.

And who compensated the banks when it all went tits-up - good old Joe Public, taxpayer.

So a return gesture is the least they can do.

poor old canary how little you understand how that worked. Thankfully a Labour Chancellor did.

If you have a known genuine contact method (phone/e-mail etc) – you could send a small amount to the supposedly genuine account, and ask them to confirm the amount received.

People ask the bank to pay the money back, but it's never done, because banks don't have any responsability fro your account being scammed because of your fault.

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