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online technical resource

disputed transactions

overview

Most bank transactions are properly made following the instructions of the account holder - and are completed successfully without any problems. However, sometimes things can go wrong. This is often because the consumer disputes having made or authorised the transaction.

Sometimes the problem is that the consumer agrees they made the transaction, but says that it was not correctly carried out or recorded. An example would be where the consumer went to make a withdrawal from a cash machine, but says the money was not dispensed by the cash machine even though it was debited to their account.

The first step for a consumer who has a problem like this is always to take the matter up with the financial business their account is held with. The quicker disputed transactions are noticed and queried, the greater the chance that they can be put right.

But if this fails to settle the problem, we can take an independent look at what has happened - and decide whether or not the financial business did anything wrong.

This section of our website explains:

  • the sorts of complaints we typically see about disputed transactions;
  • how we usually approach these sorts of complaint; and
  • if the complaint is upheld, the approach we are likely to take to putting things right.

We see complaints about disputed transactions involving:

  • plastic cards
  • cheques
  • internet banking
  • paying-in machines and
  • transactions made over the counter.

So as well as giving general information on how we deal with complaints about disputed transactions, we have also included some extra information about complaints involving these specific topics.

For complaints about transactions made with credit to buy goods or services - where the dispute concerns the quality of the goods or services provided - our technical note on goods and services bought with credit may be of help.

things we take into account

When we look at complaints about disputed transactions, we take into account:

  • the relevant law;
  • any regulations that applied at the time in question;
  • any industry codes of conduct in force at the time in question; and
  • the terms and conditions of the account that the disputed transaction was made from.

If there is a disagreement about the facts, we will make our own decision about what probably happened - using the information and evidence provided to us by the consumer and the financial business, and any additional information that we discover from our investigation of the complaint.

deciding what happened

Depending on the nature of the complaint, and the type of transaction being disputed, we are likely to ask for these sorts of things:

  • information about the normal pattern of use for the account in question;
  • the "journal roll" of the cash machine used to make the disputed transaction;
  • records for the paying-in machine used to make the disputed transaction;
  • information about the business's standard process or procedure;
  • information about any identity or security checks made in connection with the disputed transaction;
  • the consumer's recollection of where they were, or what they were doing, at the time of the disputed transaction;
  • examples of the consumer's signature;
  • website screen-shots or emails associated with the disputed transaction;
  • copies of any paperwork relating to the disputed transaction.

We ask for this information so that we can get a good understanding of the complaint - and decide it fairly. We focus on information that we believe is necessary to our consideration of the complaint. And so we expect the consumer and the financial business to provide what we have asked for - even if they do not immediately see the relevance of a question we have asked.

cash machine transactions

Most of the complaints that we see about cash machine transactions are one of the following two types:

  • the consumer says they did not make a cash machine withdrawal which has appeared on their account; or
  • the consumer's account has been debited with the full amount of a cash machine withdrawal which they attempted, but which the consumer says was not dispensed (or was only partly dispensed) by the cash machine.

We set out below the sorts of information and evidence we are likely to require for each of these types of complaint.

In addition, various types of "scam" have been reported around the use of cash machines - for example, where the machine is tampered with and/or the consumer is distracted by fraudsters.

When we look at complaints involving cash machine transactions, we consider whether the facts of the case point to some form of "scam" having taken place. And we take account of this when we assess whether or not the consumer is liable for the disputed transaction.

the consumer says they did not make the cash machine withdrawal

Our usual approach to this type of complaint is to obtain a range of information from the consumer and the financial business - including, for example, information about:

  • the consumer's whereabouts at the time the disputed transaction took place;
  • the cash machine used to make the withdrawal;
  • the card used to make the withdrawal, including how it was "recognised" by the cash machine (for example, by "reading" a microchip or magnetic stripe);
  • how the transaction was "verified" by the system (for example, by inputting a "PIN" - a personal identification number);
  • the withdrawal, including when and where it was made and - if there is more than one disputed transaction - any pattern of transactions;
  • the electronic audit trail for the withdrawal and any related transactions (for example, balance enquiries) that preceded or followed it;
  • the consumer's previous use of the cash machine.

The precise questions that we ask will depend on the particular circumstances of the complaint - and are tailored to ensure that we get the right information for the case.

Some of the information we obtain may involve third parties (for example - a print out that also shows cash machine transactions made by other customers before and after the disputed withdrawal). If it is necessary to show the consumer this information, we will remove or blank out anything relating to other customers - to maintain their privacy.

Similarly, we may need to ask the financial business for information about its cash machine or security procedures. Some of this information may be provided to us in confidence by the financial business, if it is sensitive.

Once we have obtained the necessary information, we assess whether or not the consumer probably made (or otherwise authorised) the disputed transaction.

If we decide that the consumer did not make or authorise the disputed transaction, we will go on to assess whether or not the consumer has any liability for it - and, if so, how much. In making that assessment, we will take into account:

  • the terms and conditions of the account that relate to use of the card;
  • any relevant regulations (for example, the Payment Services Regulations);
  • any relevant industry codes of practice in force at the time of the disputed transaction;
  • where the disputed withdrawal was made from a credit facility (such as a credit card account or an overdraft facility on a current account), sections 83 and 84 of the Consumer Credit Act 1974.

Where there is a series of disputed transactions, we will assess whether and how that affects any liability the consumer might have - again taking into account the law, regulations, codes and terms and conditions that apply.

the consumer says they attempted the cash machine withdrawal - but were not given the cash (or were only given some of it)

Our usual approach to this type of complaint is to obtain information such as:

  • the consumer's recollection of the cash machine transaction - including any information or messages they remember seeing on the screen of the cash machine;
  • the consumer's recollection of any interaction they had with anyone else at the time of the transaction - for example, a conversation with someone who was already at the cash machine;
  • the cash machine records to see: when the cash machine was next balanced following the disputed transaction - and whether there was any cash "over" or "under"; whether the machine took back any cash dispensed but not removed from the slot; the disputed transaction; the other customer transactions before and after it;
  • whether any other complaints have been received about malfunctions in the same cash machine around the same time.

We may also need to ask the financial business for information about its cash machine procedures. Sometimes this will include information that we need to keep in confidence - because it concerns sensitive details about security measures.

Once we have obtained the necessary information, we decide whether or not the cash machine dispensed the correct cash for the disputed transaction. If we decide that it did, we will go on to consider whether there are any other factors that might affect the consumer's liability for the transaction.

duplicate cards

Sometimes, consumers who complain to us about disputed cash machine transactions believe the withdrawals have been made by a fraudster using a duplicate card - often called a "cloned" card.

It is relatively easy to transfer some of the information on a credit or debit card (for example, information contained in a magnetic stripe) onto a blank card - or even onto a more sophisticated copy of a debit or credit card.

That information is of limited use to a fraudster where a personal identification number (PIN) is also required to complete the transaction - which is normally the case for cash machines. This means a fraudster must also obtain the personal identification number by some means.

Other features of a debit or credit card (for example, microchips) would be far more difficult to copy and incorporate into a duplicate card - and would require access to specialised technical knowledge and resources.

We will always consider whether or not it is likely that the disputed transaction was made using a duplicate card, in the light of the evidence produced in the case, including:

  • how a fraudster could have obtained the card;
  • how a fraudster could have obtained the personal identification number (PIN);
  • when, where and for what amount the cash machine withdrawal was made.

cards used in cash machines abroad

In some cases we see, the disputed cash machine transaction was made abroad. The consumer may say they were in the relevant country at the time but did not carry out or authorise the transaction. Or they may say they were not even in that country at that time - and so could not have carried out or authorised the transaction.

It can be more difficult to obtain evidence in these cases, as the transaction will have been made through the card systems of the particular country concerned. Different countries have different systems for processing card transactions. These may use different (or less sophisticated) methods of verification for transactions. It may also be more difficult for us to obtain information about the cash machine at which the card was used.

We take account of all these factors when considering complaints about disputed card transactions made abroad.

other plastic card transactions

Not all the complaints we receive about disputed transactions involve cash machine withdrawals. We also see complaints about transactions made with plastic cards in a range of other contexts - including, for example, transactions made in retail outlets, bars and restaurants, or to buy goods or services over the internet.

Typically, the consumer notices the transaction on their account and complains that it is not one they made or authorised. The transaction may have been made with a debit or a credit card - and might have been made by presenting the card in person or remotely by phone or over the internet (sometimes called "cardholder not present" transactions).

our approach

Our usual approach to this type of complaint is to obtain a range of information from the consumer and the financial business - including, for example, information about:

  • the consumer's whereabouts at the time the disputed transaction took place;
  • how the transaction was made (for example, in person or by phone or over the internet);
  • the nature of the transaction, including when and where it was made and what it was used to pay for;
  • the outlet where the transaction was made;
  • the card used to make the transaction, including how it was "recognised" by the payment system that was used;
  • how the transaction was "verified" by the system (for example, by inputting a personal identification number (PIN) or by providing security information or passwords);
  • the electronic audit trail for the transaction;
  • the consumer's previous use of the plastic card.

The precise questions that we ask will depend on the particular circumstances of the individual complaint - and are tailored to ensure that we get the right information for the case.

Some of the information we obtain may involve third parties (for example, a print out that also shows cash machine transactions made by other customers before and after the disputed withdrawal). If it is necessary to show the consumer this information, we will remove or blank out anything relating to other customers - to maintain their privacy.

Similarly, we may need to ask the financial business for information about its plastic card or security procedures. Some of this information may be provided to us in confidence by the financial business, if it is sensitive.

Once we have obtained the necessary information, we assess whether or not the consumer probably made (or otherwise authorised) the disputed transaction.

If we decide that the consumer did not make or authorise the disputed transaction, we will go on to assess whether or not the consumer has any liability for it - and, if so, how much. In making that assessment, we will take into account:

  • the terms and conditions of the account that relate to use of the card;
  • any relevant regulations (for example, the Payment Services Regulations);
  • any relevant industry codes of practice in force at the time of the disputed transaction;
  • where the disputed withdrawal was made from a credit facility (such as a credit card account or an overdraft facility on a current account), sections 83 and 84 of the Consumer Credit Act 1974.

duplicated cards

Sometimes, consumers who complain to us about disputed plastic card transactions believe the transactions have been made by a fraudster using a duplicate card - often called a "cloned" card.

It is relatively easy to transfer some of the information on a credit or debit card (for example, information contained in a magnetic stripe) onto a blank card - or even onto a more sophisticated copy of a debit or credit card.

That information is of limited use to a fraudster where a personal identification number (PIN) or other form of security verification (such as a password) is also required to complete the transaction. In that case, the fraudster must also obtain the personal identification number or password by some means.

Other features of a debit or credit card (for example, microchips) would be far more difficult to copy and incorporate into a duplicate card - and would require access to specialised technical knowledge and resources.

We will always consider whether or not it is likely that the disputed transaction was made using a duplicate card, in the light of the evidence produced in the case, including:

  • how a fraudster could have obtained the card;
  • how a fraudster could have obtained the personal identification number (PIN);
  • when, where and for what amount the card transaction was made.

cards used abroad

In some cases we see, the disputed card transaction was made abroad. The consumer may say they were in the relevant country at the time but did not carry out the transaction. Or they may say they were not even in that country at that time and so could not have carried out the transaction.

It can be more difficult to obtain evidence in these cases, as the transaction will have been made through the card systems of the country concerned. Different countries have different systems for processing card transactions. And they may use different (or less sophisticated) methods of verification for transactions. It may also be more difficult for us to obtain information about the overseas outlet at which the card was used.

We take account of all these factors when considering complaints about disputed card transactions made abroad.

card details not used in the way the consumer expected

Sometimes consumers complain that - while they agree they provided their card details to a supplier of goods or services (usually by phone or over the internet) - the supplier has used those details to make a transaction they did not authorise.

An example might be a consumer who used their debit card to pay for an item over the phone - but later found that the supplier had included extra amounts in the transaction, for charges that the consumer was not told about and had not agreed to.

When we deal with complaints like this, we obtain as much information and evidence as we can about the circumstances in which the payment was made - to help us decide what the consumer agreed the supplier could take from the card account.

quality of goods or services bought with a credit card

Where the basis of the complaint is about the quality of goods or services paid for with a credit card, section 75 of the Consumer Credit Act 1974 may apply.

chargebacks

"Chargeback" is the name given to the process that enables consumers - in certain circumstances - to challenge and claw back payments made from their plastic card accounts.

That could be a transaction appearing on a credit card account, or it could be one that appears on a current account as a debit card payment. The cases we see usually concern disputes about VISA credit and debit card, and MasterCard credit card transactions.

The main parties to plastic card transactions are:

  • the card holder - the consumer whose plastic card account has been debited;
  • the card issuer - the financial business that operates the plastic card account for the consumer;
  • the card scheme - the business that operates the payment network (for example, VISA and MasterCard are card schemes);
  • the merchant acquirer - the financial business that provides the merchant with a facility to accept payments by plastic card (usually, their bank);
  • the merchant - the business that the consumer pays using his plastic card.

complaints about chargebacks

Typically consumers who complain to us about chargebacks have asked their card issuer to try to obtain a chargeback of a transaction because:

  • they did not make or agree the plastic card transaction; or
  • the transaction was carried out by the merchant for the wrong amount, or was duplicated; or
  • the goods or services paid for were not provided.

We can normally consider complaints about chargebacks:

  • from card holders complaining about card issuers
    These are usually complaints that a chargeback was not attempted - or was attempted but was not successful.
  • from merchants who are "micro-enterprises" complaining about merchant acquirers
    These are usually complaints that the merchant acquirer accepted a chargeback request and debited the merchant's bank account with the amount of the chargeback.

Chargebacks are possible because of the contract between the card issuer (or merchant acquirer) and the card scheme. They are not a right or protection given directly to the card holder.

The exact grounds on which a chargeback may be attempted will vary, depending on the card scheme. Each card scheme operates its own rules for the plastic cards that fall within its scheme. While there are lots of similarities between these various sets of rules, there are also some important differences.

There is also normally a time limit for raising the chargeback request - usually 120 days from the transaction appearing on the account. But there are some variations between card schemes.

We consider that, as a matter of good practice, the card issuer should attempt a chargeback if the card holder has challenged a transaction and - taking account of the relevant card scheme rules - there appears on the face of it to be a fair chance that a chargeback request may succeed.

So we normally expect the card issuer to identify whether the potential exists for a successful chargeback request. And if so, to ensure that a request is processed in the right format and within any time limits that apply.

If it does not do that, then we can consider a complaint from the card holder. And we will decide whether in our opinion the chargeback would have succeeded, if it had been properly made.

Where a chargeback request is made but then refused, the card issuer can take the matter to the appeal process operated by the relevant card scheme. We cannot consider complaints about decisions made by card schemes about chargeback requests, because card schemes are not covered by the ombudsman service.

complaints brought by merchants

Chargeback complaints brought by merchants against their merchant acquirers will invariably be about chargeback requests that were made and accepted - because that is the only time a merchant will be affected by a chargeback request.

Typically the merchant will complain that the merchant acquirer had no right to take the money back out of their account in response to the chargeback request. That might be because the merchant disputes the grounds on which the chargeback was made, and/or because it considers that the merchant acquirer did not properly defend the request.

The right of the merchant acquirer to debit the merchant's account comes from the contract between them. This is often referred to as the "merchant services agreement" and is the agreement entered into at the time the card-processing facilities are first provided to the merchant by the merchant acquirer.

We will take the terms of the merchant services agreement into account, when we assess whether or not we consider the merchant acquirer was entitled to debit the merchant's account in the circumstances.

Complaints from merchants often involve chargebacks made in relation to card payments accepted over the phone or internet - known as "card holder not present" transactions. Merchant services agreements commonly impose strict rules about when and how merchants may accept these transactions - and in what circumstances they may be clawed back.

If the merchant acquirer has acted properly in accordance with the terms of the merchant services agreement, then we are unlikely to be able to uphold the merchant's complaint - even where, for example, the merchant has been the innocent victim of a fraudster who has obtained goods from them using a stolen card.

In some cases we see, the merchant says they was misled by the merchant acquirer about the risk of accepting a payment. In these cases, we consider the evidence and decide whether they were misled - and, if so, whether that affects the merchant acquirer's rights under the merchant services agreement.

disputes that turn on card scheme rules

If a party is relying on a rule in the card scheme as its reason for not attempting a chargeback in a suitable case, we will consider what the rule says as part of our consideration of the case.

Card scheme rules do not, however, normally cancel out terms in the contract between the financial business against which the complaint is brought (the card issuer or the merchant acquirer) and the party that makes the complaint (the card holder or the merchant).

cheque transactions

The complaints we see involving transactions by cheque often include problems where:

  • a cheque was accepted by a consumer and paid into their account - but was later returned unpaid because it was stolen, a forgery, or for some other reason;
  • a cheque that was meant for the consumer was stolen by a third party and paid by them into their own account;
  • a cheque was paid from the consumer's account which they say they did not sign or authorise.

a cheque that the consumer accepted - but was later returned unpaid

We frequently see complaints about a bank or building society debiting a consumer's account for the amount of a cheque already paid in earlier - usually because the cheque has been reported as stolen or forged.

Typically this happens after the consumer advertised goods for sale and received an offer from a "buyer" who paid by cheque. Often the cheque is for an amount more than the cost of the goods - and the consumer has been persuaded to draw out the surplus and send it to an "agent" nominated by the "buyer". After the consumer has paid the money, the cheque is returned unpaid and the consumer's account is debited by their bank or building society for the amount of the cheque.

Or the consumer may have been persuaded by a buyer to release goods in exchange for a cheque payment which is later returned unpaid - with the amount debited from the consumer's bank or building society account.

We can help in cases where the consumer complains that this type of fraud was able to happen because of something their bank or building society did wrong. The sorts of information and evidence we will normally need will include things like:

  • the original cheque (or a copy, if the original is no longer available);
  • any paperwork relating to the transaction;
  • the consumer's account of how they came to accept the cheque, and the events that happened after that;
  • the bank or building society's account of any discussions it had with the consumer when the cheque was paid in (for example, a statement from the counter clerk).

Once we have satisfied ourselves about what happened, we will consider whether the bank or building society has any liability for the consumer's loss. When we do this, we take into account all the circumstances, including:

  • the relevant law;
  • the terms and conditions of the consumer's bank or building society account;
  • relevant regulation or industry codes that applied at the time the problem happened.

a cheque that was meant for the consumer, but was stolen by a third party ("cheque conversion")

We often see complaints from consumers involving cheques stolen by third parties. This can include cheques in favour of the consumer being intercepted by a thief and paid into a bank account opened specifically for the purpose. Or a cheque being stolen and altered by a thief - before being paid into an existing bank or building society account.

In England and Wales lawyers often call this type of theft "cheque conversion". A consumer can normally refer a complaint to us about the bank or building society that the cheque was paid into, even if they do not hold an account with that particular bank or building society.

Complaints about "cheque conversion" sometimes involve a series of complicated events. Sometimes questions may arise about who was actually entitled to the money involved. In these cases we may need to consider whether that affects our ability to deal with the case - or to decide it fairly.

Understandably, consumers who lose cheques in this way feel very strongly that they should not have to bear the loss of the money - and they may see the bank or building society that accepted the cheque as having an obvious responsibility to pay them back what they have lost.

However, banks and building societies are not automatically liable in this situation. Much will depend on how the cheque came to be obtained by the party who paid it in - and the circumstances in which the bank or building society came to accept the cheque.

When we deal with a complaint about "cheque conversion", we will usually ask for information that includes, for example:

  • the original cheque (or a copy, if the original is no longer available);
  • information from the consumer about the cheque, including what the payment was for;
  • information from the bank or building society about the account the cheque was paid into. We may need to keep this information confidential, where it concerns a third party - even if the third party is accused of stealing the cheque.

In deciding whether the bank or building society is liable to reimburse the consumer for the loss of the cheque, we will consider all the circumstances, including:

  • any crossings, alterations or endorsements that appear on the cheque;
  • where the cheque was paid into a new account, what process and checks the bank or building society used when it opened the account and allowed the cheque to be paid in;
  • where the cheque was paid into an existing account, information about how the account was originally opened and what previous transactions took place on the account;
  • the relevant law, including the relevant sections of the Cheques Act 1957.

If we decide that the bank or building society did something wrong and is liable for the consumer's loss, we will usually require it to put things right by paying the consumer the amount of the cheque, together with appropriate interest.

Sometimes there are other losses that were also associated with the "cheque conversion" - in which case we will consider whether or not the bank or building society should compensate the consumer for those other losses as well.

a cheque paid from the consumer's account, which the consumer says they did not sign or authorise

We sometimes see complaints from consumers who say that their bank or building society has paid a cheque drawn on their account, which they did not sign or authorise.

This might happen, for example, where someone takes a cheque from a cheque book that a consumer does not often use (and so does not realise is missing) - and writes out a cheque, forging the true consumer's signature.

When we consider complaints about forged cheques, we will usually ask for:

  • the original cheque (or a copy, if the original is no longer available);
  • information from the bank or building society that paid the cheque;
  • information from the bank or building society that received the cheque - this may include information that we will need to hold in confidence, if it relates to the account of a third party;
  • any information the consumer has about the matter, and examples of their signature on other documents.
  • information about the way the consumer's account has been used in the past, in particular in relation to cheque payments.

Complaints about forged cheques sometimes involve underlying disputes between family members - or even between joint account holders. Depending on the circumstances, this may make it difficult for us to decide a case fairly.

For example, we sometimes see cases where there is a dispute about who exactly is entitled to the money drawn by means of the cheque - or where the evidence of the third party is essential to decide the case.

In these cases we may decide that the matter would be better dealt with by other means (for example, proceedings that are already underway for a financial settlement in a divorce).

Occasionally consumers, or their banks or building societies, want to submit a report from a handwriting expert, to support their argument that the cheque was (or was not) signed by the consumer. We do not require either party to obtain this kind of report, and the costs of commissioning a handwriting expert will not automatically be refunded to a consumer whose complaint is successful. We would also assess the cost of the report in relation to the amount of the transaction in dispute.

We do not usually commission handwriting reports ourselves. In the cases we see, these types of report are not generally of significant help to us.

A bank or building society is not normally entitled to debit a consumer's account for the amount of a cheque that the consumer did not sign. But there are some special circumstances when this normal rule may not apply.

We will take all the circumstances of the case into account, including the relevant law, when deciding whether (and to what extent) a bank or building society is liable to the consumer for the payment of a forged cheque.

internet banking

We see relatively few complaints about internet banking. But we sometimes deal with complaints about transactions made using internet banking, which the consumer says they did not make or authorise.

When we consider these types of complaint, we will require information from the bank, including:

  • evidence of the steps taken to initiate and complete the disputed transaction;
  • any additional security measures, such as card-readers, used to make the transaction;
  • details of where the transaction was sent to - we may need to keep some of this information confidential if it concerns a third party, even if that third party is accused of fraud;
  • the terms and conditions of the consumer's internet banking facility.

We will also ask the consumer for information, which is likely to include:

  • anything the consumer knows about the disputed transaction - for example, whether they suspect a particular individual of having made it without their consent;
  • information about how the consumer usually carried out their internet banking;
  • information about how they stored and used their internet banking security information - such as passwords, personal identification numbers (PINs) and pre-chosen security questions.

When we assess whether or not the consumer has any responsibility for a disputed transaction, we take this information into account, together with any relevant law (including sections 83 and 84 of the Consumer Credit Act 1974, where some or all of the transaction was made from a credit facility on the consumer's account).

"phishing"

"Phishing" is the term normally used to mean a particular type of internet fraud, where the fraudster gains the consumer's security details through the use of an unsolicited email - which appears to the consumer to have originated from their bank.

Clicking on a link in the email takes the consumer through to a counterfeit website set up by the fraudster to mimic the bank's online process. When the consumer enters their security information into this counterfeit site, it is used by the fraudster to make withdrawals from the consumer's account.

Fortunately most consumers who receive "phishing" emails recognise that they are fraudulent and do not respond to them.

But we sometimes see complaints from consumers who have responded to a "phishing" email and consider that, in the circumstances, they should not be liable for a transaction made by the fraudster.

The fact that the transaction was undoubtedly made by a fraudster does not usually mean that the bank must automatically refund the consumer. When we consider complaints about disputed transactions made through "phishing" fraud, we are likely to ask for information such as:

  • the terms and conditions of the consumer's internet banking facility;
  • evidence of the steps taken to initiate and complete the disputed transaction;
  • any copies of the "phishing" email, or screenshots of the "phishing" website, that the consumer or the bank has retained;
  • the consumer's recollection of what steps they took in response to the "phishing" email;
  • any security information, such as passwords or codes, used to make the transaction;
  • any online or other warnings given by the bank to the consumer about the dangers of "phishing", prior to the disputed transaction;
  • any special circumstances surrounding the consumer's use of internet banking.

When we assess whether or not the consumer has any responsibility for a disputed transaction, we take this information into account, together with any relevant law (including sections 83 and 84 of the Consumer Credit Act 1974, where some or all of the transaction was made from a credit facility on the consumer's account).

transactions made over the counter

Some of the disputed transactions that consumers complain about were made over the counter of their bank or building society.

Typically in these cases, the consumer considers that someone else must have impersonated them at the bank or building society branch and made the transaction (usually a cash withdrawal) without their knowledge.

Sometimes the consumer suspects that a member of staff from the bank or building society was dishonestly involved in the matter.

The type of information that we will normally need to see in complaints like this includes:

  • any paperwork relating to the disputed transaction, such as withdrawal slips;
  • any recollection the bank or building society has of the transaction - for example, a statement from the counter clerk who dealt with the transaction;
  • if dishonesty by the counter staff is alleged, additional information from the bank or building society about any previous similar disputed transactions involving the branch and employee in question. We may need to keep some of this information confidential where it concerns, for example, third parties or the employment files of individual employees;
  • any CCTV coverage available for the time the disputed transaction took place (although in the complaints we see this type of evidence - even where available - is rarely conclusive);
  • information from the consumer about where they were when the disputed transaction was made;
  • information about the previous pattern of transactions on the account.

We will use this information to decide whether or not the consumer made the transaction - or authorised someone else to make it.

transactions made using paying-in machines

As well as seeing complaints about disputed withdrawal transactions made through cash machines, we also see some complaints about disputed deposits made through paying-in machines (including night safes).

Typically the consumer in these cases complains that they made a deposit through the machine that has not appeared on their account - or that they have been credited with less than they paid in.

Sometimes the consumer suspects that a member of staff from the bank or building society was dishonestly involved in the matter.

The type of information that we will normally need to see in complaints like this includes:

  • any paperwork relating to the disputed transaction, such as deposit slips;
  • the records for the paying-in machine for the period during which the consumer says the deposit was made;
  • information about the bank or building society's procedure for processing payments from paying-in machines;
  • if dishonesty by the counter staff is alleged, additional information from the bank or building society about any previous similar disputed transactions involving the branch and employee in question. We may need to keep some of this information confidential where it concerns, for example, third parties or the employment files of individual employees;
  • any CCTV coverage available for the time the disputed transaction took place (although in the complaints we see, this type of evidence - even where available - is rarely conclusive);
  • information from the consumer about exactly what was deposited and their recollections of making the transaction;
  • information about the previous pattern of transactions on the account.

We will use this information to decide whether or not the consumer made the deposit - and, if so, how much money was deposited.

disputed transactions where joint account holders do not agree

We sometimes see complaints involving disputed transactions on joint accounts, where the joint account holders do not agree.

case study

Mr X and Miss Y have a joint current account that they opened when they began living together. They later part on bad terms - but agree to keep the joint account open to pay for the mortgage on their house until it is sold. They each have a plastic card linked to the account.

Some time later Mr X becomes aware that Miss Y has been using her plastic card to make cash machine withdrawals from the account.

There is no doubt about who actually made the disputed withdrawals - and the bank cannot be held responsible. The dispute is between Mr X and Miss Y, and Mr X should look to Miss Y (not to the bank) to pay him back.

However, sometimes the situation is more complicated than in the case study above - and the consumer may feel that the financial business has itself done something wrong.

For example, one or other of the joint account holders may have:

  • told the financial business that there has been an acrimonious split between them;
  • asked the financial business to "freeze" the account; or
  • asked the financial business to pay only specified items (for example, insurance premiums or mortgage payments on a joint house).

If this is the case, the account holder who has lost money because of disputed withdrawals made by the other account holder may complain that the financial business is fully or partly to blame for their loss.

We can usually consider complaints like this, although sometimes we may have to decide that we cannot fairly decide a particular case. This will mainly happen where there is a dispute between the joint account holders about the ownership of the money that was in the account - or where the evidence of both account holders is essential (we cannot make third parties answer our questions).

Circumstances are likely to be very individual, and we will consider each case on its own individual facts. The matters we will take into account when deciding a complaint like this will include, for example:

  • the terms and conditions of the joint account - though we would also expect a financial business to follow good practice, and not simply rely on the strict terms of the account;
  • any relevant discussions between the consumer and the financial business (or between the other account holder and the financial business) prior to the disputed transactions;
  • any other proceedings that may be relevant (for example, legal proceedings for a financial settlement in the joint account holders' divorce).;
  • whether the financial business took reasonable steps to prevent misuse of the account, once it had been made aware of the disagreement.

help for businesses and consumer advisers

contact our technical advice desk on 020 7964 1400

This is part of our online technical resource which sets out our general approach to complaints about a wide range of financial products and issues. We would like your feedback on how helpful you found it. Please also use the feedback form below to tell us about anything you think we could clarify or explain better.

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  • The law requires us to decide each case on the basis of our existing powers and what is fair in the circumstances of that particular case.
    We take into account the law, regulators' rules and guidance, relevant codes and good industry practice at the relevant time.
    We do not have power to make rules for financial businesses.
    Our current approach may develop in the light of circumstances disclosed by further cases we receive.
    We may decide that fairness requires a different approach in a particular case.