What rights do credit card fraud victims have?

credit card fraud phishing©iStock.com/weerapatkiatdumrong

"I BELIEVE a fraudulent payment has been made with my credit card, I don't recognise the transaction at all. What are my rights?"

One in three people have become victims of a crime which averages at one theft every nine seconds. In the UK alone, around £1.2 million is lost every day, despite the advent of chip and PIN technology.

No wonder that the banks are sometimes reluctant to give fraud victims their money back. According to the FCA 10% of people that lose money due to fraud were actually not liable and should have been refunded.

How do you know whether you're liable? Read this guide.

Liability 101

When you're liable

According to the Lending Code, the consumer is liable for the cost of fraud - that is, must pay the cost of the fraudulent transaction - when:

To recap, card companies can refuse to refund money, when the cardholder has voluntarily compromised their security.

According to the terms and conditions of American Express credit cards, for example, those who "contributed to, were involved in, or benefited from the loss, theft or [the card's] misuse" won't get a refund.

Writing the card's PIN on the card itself, keeping it written down in your wallet or telling someone else the PIN number (see the full guide to PIN fraud here) will all result in the cardholder being liable for the full amount of any unauthorised transaction.

You'll find the 3D Secure requirement in the small print of many credit cards: if cardholders don't use the extra password protection that is, in theory, an example of 'lack of reasonable care' and they could be liable in case of fraud.

However, we've never heard of an instance of a consumer actually being made to pay for fraud for this reason and, in any case, these 3D Secure systems are, as of 2014, less used than previously.

For more on additional cardholder liability see this guide.

The good news is that the burden of proof lies with the credit card provider. In other words: they need to prove you're guilty.

When you're not liable

Again, according to the Lending Code, consumers are not liable for fraud when:

Card not present fraud includes unauthorised transactions that are made over the phone, using the internet and through mail order companies.

This is the most common form of card fraud (under the category of identity theft) and requires the criminals to obtain the card's details but not the card itself, nor the PIN number.

Card skimming is the most common form of fraud at cash machines. Fraudsters attach small cameras and card readers to ATMs.

These record the card's details as well as the PIN that is entered. Skimming can also be carried out in shops, restaurants and petrol stations. In these cases, a corrupt employee uses a separate device to electronically copy the card's data from its magnetic strip.

A whole new credit card can then be made using this information, and subsequently used in person with the PIN.

Fraudsters also commonly use the internet to obtain the details of other people's cards.

Common ploys include viruses that redirect browsers to fake websites that then encourage users to enter their card details. They may also send emails to try and direct people to the fraudulent sites ("phishing").

See this guide for more on taking precautions against online card fraud. Additionally, only shopping with websites you know and trust is normally a good idea.

Skimming and card not present scams require more vigilance. Avoid cash machines that look tampered with and religiously check all statements. Also ensure that all correspondence relating to the card's details is either kept safe or thoroughly destroyed.

See our full guide to the staying safe against fraud offered on credit cards for more on how you're protected.

All in all, it's reassuring to note that consumers are not liable for money lost through these types of scams.

First steps after fraud

The first step when an account has been compromised should always be to get in touch with the credit card provider to notify and reclaim fraudulent transactions as soon as possible.

Our full guide to help available if a card was lost or stolen is here.

Victims of card fraud may also want to contact the three credit reference agencies Callcredit, Experian and Equifax to check that no credit applications have been made in their name.

Comments

1
23 June 2016
mrs susan hunter-brown

I have never had a card and I have had a sums of arrears sent me ? I phoned the credit card people and they said it was opened in October 2015 and payment wasn't paid 12/5/2016? Is there anyway I can find out about any other transactions made in my name?

27 June 2016
Choose team

Hi Susan,

We have a guide to identity theft by CIFAs, which has some information about what to do if you experience identity theft here: <a href="http://www.choose.net/money/guide/features/identity-theft-cifas.html" rel="nofollow">http://www.choose.net/money/gu...</a>

Hope this helps.

2
22 November 2015
Lukas Adam

Can someone get caught for purchasing goods online?

14 June 2016
Ash

IP addresses

14 June 2016
Ash

Yes lukas they can they can track everything like ip addresses and catch the culprit.

3
29 August 2015
Richard L Boyd

I lost my laptop and wallet in a taxi and my debit card was used on a betting website which I've previously used. My log in details for the site is stored on my laptop. The person who has got my laptop has used my card and details on my laptop and cleared my account out. I reported this to Nationwide and all they said was that they will cancel my card and send the report to fraud head office. How long before I will be refunded as it has left me with nothing to live on?

23 October 2015
Amina Saadiya

Hi there Richard,

Just wondering what happened with your case as this has happened to me. I believe my phone was hacked into and they also played on a gambling site I am logged into with over 10.000 pound. I reported to nationwide and they are saying it is my own negligence and refusing to pay back my money. I am pretty angry as you could imagine.

4
11 November 2014
Rosemary Thomson

I have recently been a victim of fraud through a company called loan spotter. They took money out of my bank account without my permission. So how do I go about getting it back as I checked my account and it said card not present.

5
5 November 2014
Paddy

My credit card was fraudulently used to buy something from Sony. I informed my credit card company who stopped my card and issued a new one and refunded me the money. Now Sony have blocked my use of my already purchased games, what do I do?

6
23 February 2013
Tony Chenery

I have had two payments taken from my card that are not mine. I have notified the card provider. My question is how long does it take to re-credit your card and do we have to pay the balance and interest in the meantime.

12 December 2015
Caroline

My bank said 180 days that's the NAB. I have a 1755.00 flight charged by Malaysia Air that I know nothing about.
It's annoying that it takes so long for the bank to fix it up. I felt like they think I did it.

24 October 2014
evan

My bank said 3 weeks.

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