UK bank customers whose money is taken without their consent have legal protections that could help them recover their cash. Under the Payment Services Regulations 2017, banks generally have a responsibility to refund customers when payments have been made without their authorisation.
Whether it is an unfamiliar card payment, a suspicious bank transfer or a company collecting money without permission, the rules depend on how the money was taken and the circumstances surrounding the transaction.
Can a bank take money without permission?
Banks cannot simply withdraw money from a customer's account without a valid legal or contractual reason. Most transactions require the account holder's consent, although money can legitimately be taken in circumstances such as agreed loan repayments, overdraft charges, court orders, or payments authorised under a contract.
If you spot a transaction you do not recognise, you should contact your bank immediately and report it as unauthorised. Under Regulation 76 of the Payment Services Regulations 2017, banks must generally refund unauthorised payments as soon as possible and, in most cases, by the end of the next business day after becoming aware of the transaction.
There are exceptions, including where a bank has reasonable grounds to suspect fraud by the customer and follows the relevant reporting requirements.
Rights when criminals use your details
Customers have important protections if criminals use their bank details or card information to make payments without permission. Crucially, a bank cannot automatically blame a customer simply because their card, PIN or online banking details were used.
The bank generally has to demonstrate that the transaction was authenticated, accurately recorded and properly executed. It must also provide evidence if it claims the customer acted fraudulently or with gross negligence. Where an unauthorised payment is established, customers may also be entitled to recover additional charges and interest caused by the transaction.
When a company takes money
Not every unexpected payment is the result of fraud. Companies can also make mistakes, particularly when collecting subscriptions, memberships and recurring payments.
If a Direct Debit is collected incorrectly, the Direct Debit Guarantee provides protection. Customers can ask their bank for an immediate refund of an incorrect payment. However, cancelling a Direct Debit does not automatically end the contract with the company, and you should still check whether you have any outstanding contractual payments.
If the bank refuses a refund
A bank rejecting your refund request does not necessarily mean the matter is over. Customers can make a formal complaint and ask the bank to explain why it believes the transaction was authorised. If the dispute remains unresolved, you can take your case to the Financial Ombudsman Service.
