Yesterday the Financial Conduct Authority (the UK bank regulator) issued a report on Fair treatment for consumers who suffer unauthorised transactions. This is an issue in which we have an interest, as fraud victims regularly come to us after being turned away by their bank and by the financial ombudsman service. Yet the FCA have found that everything is hunky dory, and conclude “we do not believe that further thematic work is required at this stage”.
One of the things the FCA asked their consultants is whether there’s any evidence that claims are rejected on the sole basis that a pin was used. The consultants didn’t want to reply on existing work but instead surveyed a nationally representative sample of 948 people and found that 16% had a transaction dispute in the last year. These were 37% MOTO, 22% cancelled future dated payment, 15% ATM cash, 13% shop, 13% lump sum from bank account. Of customers who complained, 43% were offered their money back spontaneously; a further 41% asked; in the end a total of 68% got refunds after varying periods of time. In total 7% (15 victims) had claim declined, most because the bank said the transaction was “authorised” or following a”contract with merchant” and 2 for chip and pin (one of them an ATM transaction; the other admitted sharing their PIN). 12 of these 15 considered the result
unfair. These figures are entirely consistent with what we learn from the British Crime Survey and elsewhere; two million UK victims a year, and while most get their money back, many don’t; and a hard core of perhaps a few tens of thousands who end up feeling that their bank has screwed them.
The case studies profiled in the consultants’ paper were of glowing happy people who got their money back; the 12 sad losers were not profiled, and the consultants concluded that “Customers might be being denied refunds on the sole basis that Chip and PIN were used … we found little evidence of this” (p 49) and went on to remark helpfully that some customers admitted sharing their PINs and felt OK lying about this. The FCA happily paraphrases this as “We also did not find any evidence of firms holding customers liable for unauthorised transactions solely on the basis that the PIN was used to make the transaction” (main report, p 13, 3.25).