You Sent Money to a Scam and Your Bank Refused a Refund
Authorised push payment (APP) fraud — where you are tricked into sending money to a fraudster by bank transfer — is the most common type of payment fraud in the UK. This page explains the mandatory reimbursement rules introduced in October 2024 and what to do if your bank refuses to repay you.
Quick Answer
Since October 2024, the Payment Systems Regulator (PSR) requires banks and payment firms to reimburse most victims of APP scams up to £85,000. The bank has 35 business days to decide. If your bank refuses and you disagree, escalate to the Financial Ombudsman Service (FOS), which can award compensation. Report to Action Fraud as well.
Full Explanation
Authorised push payment (APP) fraud occurs when a person is deceived into authorising a bank transfer to a fraudster. Common forms include impersonation of HMRC, a solicitor, a bank's fraud team, or a romantic partner (romance fraud), as well as invoice redirection fraud targeting businesses.
From 7 October 2024, the PSR's mandatory APP fraud reimbursement scheme came into force under Payment Services Regulations 2017 (as amended). Both the sending bank and the receiving bank share the cost of reimbursement equally. The maximum reimbursement amount is £85,000 per claim. Banks can apply a £100 excess in limited circumstances and can decline claims where the victim was grossly negligent (a high bar) or failed to act on a specific fraud warning from the bank before making the payment.
To make a claim: report the fraud to your bank as soon as possible. The bank must acknowledge the claim within 5 business days and issue a decision within 35 business days. If the bank refuses or reduces the reimbursement, escalate to the Financial Ombudsman Service (FOS), which is free to consumers. The FOS can award up to £430,000 and its decisions are binding on the bank.
In addition to the PSR scheme, s.2 of the Fraud Act 2006 makes APP fraud a criminal offence. Reporting to Action Fraud (0300 123 2040) creates a crime reference number, which may be needed for FOS complaints and insurance claims.
The PSR scheme only applies to Faster Payments and CHAPS transfers within the UK. International transfers, card payments, and cryptocurrency transactions are not covered.
Legal Basis
- §Payment Services Regulations 2017 (as amended by the Payment Services (Amendment) Regulations 2024) — mandatory APP fraud reimbursement scheme
- §PSR APP Fraud Reimbursement Scheme (PS23/3, effective October 2024) — £85,000 maximum reimbursement
- §Fraud Act 2006 s.2 — criminal offence of fraud by false representation
- §Financial Services and Markets Act 2000 s.228 — FOS jurisdiction and binding awards
What To Do
Report to Your Bank Immediately
Call your bank's fraud line as soon as you realise you have been scammed. The bank may be able to recall the payment if the receiving bank has not yet processed it. Ask the bank to freeze the recipient account and file a formal fraud report. Note the date, time, and name of the person you spoke to.
Report to Action Fraud
Report the fraud online at actionfraud.police.uk or by calling 0300 123 2040. You will receive a crime reference number. Provide this to your bank when making your reimbursement claim.
Make a Formal Reimbursement Claim to Your Bank
Submit a formal written claim to your bank citing the PSR APP reimbursement scheme. Include the date and amount of the payment, the account you sent it to, details of how you were deceived, and any evidence (emails, texts, screenshots). The bank must respond within 35 business days.
Escalate to the Financial Ombudsman Service
If the bank refuses or offers less than you believe you are owed, and you have received a final response letter (or 8 weeks have passed without a response), escalate to the FOS at financial-ombudsman.org.uk. The FOS is free, can award up to £430,000, and its decisions are binding on the bank. You must refer the complaint within 6 months of the bank's final response.
Important Deadlines
Important Warnings
Report to your bank immediately — the faster you report, the greater the chance of recovering the funds before they are withdrawn by the fraudster.
Banks can refuse reimbursement if they gave you a specific warning about the fraud risk before you made the payment and you proceeded anyway.
The PSR scheme only covers Faster Payments and CHAPS within the UK. International transfers, card payments, and cryptocurrency are not covered.