In the UK, card fraud costs its victims more than £340 million a year. The good news is that your card provider should refund you immediately if you get stung. However, our latest research shows this isn’t always the case.
Banks are required by law to give victims of fraud an immediate refund. Yet, our recent survey found that almost a third of us are kept waiting for weeks, or even months, for redress, while the bank decides if the customer has acted fraudulently or with ‘gross negligence’.
Given that card fraud victims eventually get their money back in 98% of cases, it seems too many card providers are being unfairly suspicious of their customers.
When fraud doesn’t look like fraud
To understand why banks are delaying refunds, it’s worth touching on how card fraud can happen. For a start, according to our survey, 61% of respondents who’d been victims of fraud had their card details used by fraudsters to make online purchases. These transactions can understandably look legitimate to card providers.
Shoulder-surfing is also a popular tactic. All thieves need to do is spy on you when you’re punching in your Pin and then steal your card. I always try to shield my Pin as much as possible, but in my experience, it’s hard to cover a Pin pad completely and still enter numbers accurately.
And fraudsters don’t even need to know your Pin. I recently visited Cambridge University’s computer lab and was amazed when they took my card and bought soft drinks at a canteen, without me ever telling them my Pin. To the card company, it would have looked like the person who carried out the transaction used my Pin. In fact, the technicians used a device that can be concealed up a sleeve to use my card. See the graphic below to see how this device worked.
Fraudulent purchases or cash withdrawals made using a card and Pin together can be considered ‘gross negligence’ on the customer’s part. As you can tell, that’s often not the case.
Don’t keep me waiting
Given that banks have to pick up the bill for fraud, it’s reasonable to conclude that many of them drag their feet when it comes to paying claims – but this is short-sighted. Treating claims quickly and efficiently enhances customer loyalty. After all, most of the people we hear from who have had a fraud claim delayed or rejected are loyal customers with immaculate track records.
Banks should do everything they can to help victims of fraud, as there are often large sums at stake that can leave people seriously out of pocket and unable to pay essential bills.
Have you ever been a victim of card fraud? Did your bank do everything it could to help you recover your money?