Dealing with a Phantom Cash Withdrawal and Forged Cheques

Fraudulent Withdrawals from your Bank Account

Phantom Cash Withdrawals

A phantom cash withdrawal is a withdrawal from an ATM where money has been taken from a customer’s account, yet neither the customer nor the bank admits liability. Your bank statement shows a withdrawal from a cash machine which you never made. Are you liable here?

Under the Banking Code (where banks promise to act fairly and reasonably in all their dealings with the public), unless the bank can show that you have acted fraudulently or without reasonable care, the most you would ever be liable for is £50 and often nothing at all.

You may be liable for a fraudulent withdrawal if you have not acted with reasonable care to protect your card from misuse. This would include: 

  • Giving your Personal Identification Number (PIN) to another person
  • Writing your PIN on your card or on something else you keep with your card
  • Opting for a PIN which is easy to guess, such as 1111 or your date of birth 
The onus is always on the bank to show that you did not act with reasonable care, and not on you to prove your innocence

In the circumstances when there is a phantom cash withdrawal from the  account you should write to your bank, referring to the Banking Code, and requesting that it refund you the phantom cash withdrawal amount. It your bank refuses to do so, ask to make a formal complaint using the bank’s official procedure.  

If you are not satisfied with the response, take your case to the Financial Ombudsman Service (FOS, a free and independent service that helps to settle disputes between consumers and financial companies like banks). Please note that the FOS can consider your complain only after the bank complaints procedure has been tried and the bank has not resolved the matter to your satisfaction, and has given you a final response. As an exception, the FOS will consider your case if you have given your bank eight weeks to respond to your formal complaint and you have received no response.

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For more information on:

  • Forged Cheques
  • Your bank statement shows a cheque cashed that you did not write. Is it too late to save your money?