Fraud Disputes: Your Rights and How to Get Your Money Back

Bank transfer (APP) fraud, recovery failures, warning failures, PSR mandatory reimbursement, section 75 and chargeback. The four routes to recovery.

Financial Ombudsman Service (FOS)

4 sub-sectors covered

UK consumer fraud sits at the intersection of three remedies that most victims do not know exist together. The Payment Systems Regulator's mandatory reimbursement scheme, effective 7th October 2024 (PSR Policy Statement PS24/7), requires sending and receiving banks to share the cost of authorised push payment (APP) fraud losses, with a per-claim cap of £85,000 (reduced from the £415,000 originally proposed in consultation, following representations from smaller payment service providers). The cost is split equally between sending and receiving payment firms. The PSR estimated that the £85,000 cap would still cover 99.8 per cent of cases by volume and roughly 90 per cent of fraud value.

Section 75 of the Consumer Credit Act 1974 makes credit card issuers jointly liable for fraud-affected purchases between £100 and £30,000. Chargeback through the Visa and Mastercard scheme rules is a parallel route for card-funded transactions. Together, the three routes cover almost every consumer fraud scenario.

What victims most often run into is a bank's first-line response that says you authorised the transaction or you sent the money voluntarily, so we cannot reverse it. Both responses misstate the law in most APP-fraud scenarios. Under the PSR mandatory scheme, voluntary authorisation by a victim who has been deceived is exactly what the scheme reimburses. The bank's role is to assess whether the victim acted with reasonable care, not to refuse reimbursement on the existence of authorisation alone.

Key Legislation

PSR Policy Statement PS24/7 (Mandatory Reimbursement, effective 7th October 2024)
Contingent Reimbursement Model (CRM) Code
Consumer Credit Act 1974 (s.75)
Visa and Mastercard chargeback scheme rules
Data Protection Act 2018 (s.168 for distress)
FCA Handbook: BCOBS, DISP

Complaint Route

Financial Ombudsman Service (FOS)

Always complain to the company directly first. Give them 8 weeks to respond. If unresolved, escalate to the relevant ombudsman or ADR scheme listed above. EvenStance guides you through every step.

The most common fraud disputes

APP fraud (authorised push payment). The victim is deceived into authorising a payment to an account controlled by the fraudster. Common variants: investment scams (false brokers, fake bonds, romance-investment hybrids), purchase scams (goods or services that never arrive), impersonation scams (someone pretending to be the bank, the tax authority, or a family member), invoice redirection (a known supplier's invoice altered to redirect payment). The PSR mandatory reimbursement scheme covers most of these; specific carve-outs apply for international payments, account-to-self payments, and gross negligence cases.

Recovery failures. The bank failed to act promptly to recover the funds once notified, missed an opportunity to freeze the receiving account before onward transfer, or failed to engage with the receiving bank's recovery process. The BCOBS prompt-action obligations apply and the FOS has been increasingly willing to award separately for recovery failures even where the underlying reimbursement was paid.

Warning failures. The bank failed to display an appropriate Confirmation of Payee mismatch warning, displayed the warning in a way that minimised it, or failed to detect transaction patterns that should have triggered enhanced friction at the payment stage. The Confirmation of Payee system, expanded under the PSR's directions, is a substantive consumer protection; failure to operate it correctly is a regulatory breach.

PSR mandatory reimbursement disputes. The bank has reimbursed less than 100 per cent of the loss, citing partial gross negligence, or has refused reimbursement outright on the basis that the consumer should have known the payment was a scam. The FOS regularly upholds these complaints where the bank's gross-negligence finding was made on a strict reading of warning ignored rather than the proportionate assessment the scheme requires.

Card-funded fraud. The transaction was made on a credit or debit card. Section 75 of the Consumer Credit Act 1974 applies to credit card purchases between £100 and £30,000; chargeback applies to debit and credit through the scheme rules. Both routes can run alongside any APP-fraud claim; the consumer is not required to choose one.

The first fob-off and the rebuttal that works

The bank's first-line response on APP fraud is one of three. First: you authorised the payment yourself, so we cannot reverse it. This misstates the PSR mandatory scheme. The scheme exists precisely because the victim authorised the payment under deception. Second: you ignored the warning we showed you. Look at the warning. The PSR's framework expects warnings to be specific, prominent, and proportionate to the risk. A generic prompt displayed once in small text is not an effective warning. Third: you did not respond reasonably to our follow-up questions. Sometimes legitimate where the consumer ignored a clear bank call asking about a specific suspicious transaction; often weak where the bank's contact was generic, mistimed, or itself confusingly similar to a phishing attempt.

The rebuttal in three moves. First, cite the PSR mandatory reimbursement scheme by name and reference the specific scheme rules the consumer is engaging. The PSR has published the relevant directions; quote the operative paragraphs. Second, separate the gross negligence test from the authorisation question. The bank's case has to be that the consumer acted with gross negligence, not simply that the consumer made the payment. Gross negligence under the scheme is a high bar; carelessness, mistake, or being deceived by a sophisticated fraudster does not meet it. Third, parallel the route. Where the payment was funded by credit card or debit card, also engage section 75 (credit card) or chargeback (both). Running parallel routes does not weaken the APP-fraud claim and gives the consumer a second remedy if the PSR route is refused.

Where the loss is large or the bank is taking a deliberately strict line, the next move is the Financial Ombudsman Service. The FOS has been issuing decisions consistently favourable to consumers on APP fraud reimbursement where the bank's gross-negligence reasoning was not properly evidenced.

Escalation path

PSR mandatory reimbursement claims. Complaint to the sending bank (or jointly to sending and receiving bank where both are accountable). The bank must respond within the timeframe set by the PSR direction (currently 35 working days for the substantive decision, with interim updates). If the consumer is dissatisfied, escalation is to the FOS as the mandatory ADR scheme. DISP 1.6.2 of the FCA Handbook applies for the broader complaint-handling clock.

Section 75 claims. Complaint to the credit card issuer. Eight-week clock under DISP 1.6.2. Escalation to the FOS after the FRL or eight weeks.

Chargeback claims. Submitted to the card issuer under the relevant scheme rule (Visa or Mastercard). Time limits depend on the dispute reason code; many are 120 days from the transaction or from when the consumer first became aware. Card issuer disputes about chargeback handling go to the FOS.

Action Fraud reporting. Parallel route, not a remedy. Reporting to Action Fraud and obtaining a Crime Reference Number strengthens the consumer's position with the banks and the FOS. The National Crime Agency runs Action Fraud; the report is intelligence for law enforcement and does not by itself trigger recovery.

FOS award limit. £455,000 for complaints referred from 1st April 2026 about acts on or after 1st April 2019, and £205,000 for complaints referred from the same date about earlier acts. Practical fraud awards are usually well below the cap, but the cap is sufficient for almost all consumer fraud cases.

What it costs and how long it takes

All four routes are free to the consumer. Typical timelines: PSR mandatory reimbursement, 35 working days for the bank decision, then ADR if disputed; section 75, eight weeks for the card issuer's decision, then ADR; chargeback, variable, often 30 to 90 days for the card issuer to process; FOS escalation, average case-handling time across all product lines was reduced to just under three months by the end of 2023/24, with the FOS targeting 90 per cent of cases resolved within six months.

Action Fraud reporting takes 15 to 30 minutes online. The Crime Reference Number arrives by email, usually within 48 hours.

Where the loss is above £85,000 and falls outside the PSR cap, or where the case involves international payments that the scheme does not cover, the FOS is still available up to its £455,000 limit and court action is the residual route. Civil recovery against the fraudster is often impractical; civil recovery against negligent intermediaries (the receiving bank, the platform that hosted the scam) can be worthwhile in larger losses.

How EvenStance helps with fraud disputes

Frank's fraud flow identifies which of the four routes applies based on how the payment was made, drafts the complaint citing the specific PSR direction or CCA section, tracks the relevant clock (35 working days for PSR, eight weeks for s.75, chargeback timeframes by reason code), and prepares the FOS submission where escalation is needed.

The platform also produces the Action Fraud report alongside the bank complaint so the Crime Reference Number is on the file from the start, and generates the Subject Access Request to the bank for the transaction audit trail and any internal fraud-team notes.

Sub-sectors Covered

APP Fraud - PSR Mandatory ReimbursementAPP Fraud - Recovery FailureAPP Fraud - Warning FailuresCybersecurity / Scams (Non-APP)

Frequently Asked Questions

My bank says I authorised the payment so they will not refund. Are they right?

Generally no, in APP-fraud cases. The PSR mandatory reimbursement scheme, effective from 7th October 2024, requires the sending and receiving banks to share the cost of authorised push payment fraud losses up to £85,000 per claim. The whole point of the scheme is that the victim authorised the payment under deception. The bank's defence has to be that you acted with gross negligence, which is a much higher bar than simply making the payment. Insist on a reimbursement assessment under the scheme, not a refusal based on authorisation alone.

How long do I have to claim under section 75 for fraud on my credit card?

The FCA Handbook DISP rules apply: six years from the transaction or three years from the date you knew or should have known about the fraud. Court limitation is six years from breach under section 5 of the Limitation Act 1980. The Financial Ombudsman applies similar principles. Complain to the credit card issuer first; escalate to the FOS at the eight-week mark.

Can I claim under both PSR and section 75?

Yes, if the facts engage both. PSR reimbursement covers APP fraud (push payment to a fraudster's account). Section 75 covers card purchases where the merchant misrepresented or breached contract. Running both routes in parallel does not weaken either, but you are entitled to be made whole only once: any reimbursement under one route reduces what is recoverable under the other.

What is Confirmation of Payee and why does it matter?

Confirmation of Payee is a check that compares the payee name you enter with the actual name on the receiving account. A mismatch should trigger a warning. The PSR has directed banks to implement Confirmation of Payee on most payment types, and a failure to display an appropriate warning when there was a mismatch is a substantive consumer protection failure that the FOS has been willing to address even where the bank is otherwise reimbursing the loss.

Should I report fraud to Action Fraud as well as my bank?

Yes. The Action Fraud report produces a Crime Reference Number that strengthens your position with the bank and any ADR scheme. The report itself does not trigger recovery; it is intelligence for law enforcement and a paper trail for the consumer. The report takes 15 to 30 minutes online and should be filed at the same time as the formal complaint to the bank.