Fraudulent Withdrawals from your Account

Dealing with a Phantom Cash Withdrawal and Forged Cheques

Phantom Cash Withdrawal

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. The ombudsman’s orders are binding on your bank, but you can still take the case to court if not satisfied.  

Forged Cheques

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

  • Your bank should take action provided you bring the matter to its attention within six years of the forged cheque being drawn on your account.  If you alert the bank as soon as you can, you will not normally be liable for the amount written on the cheque and the money should be re-credited to your account. If the cheque has been forged, that is a criminal offence and the bank should notify the police.

  • You can be held liable for the sum on the cheque if you have infringed the banks’ terms and conditions. This will include giving someone a blank cheque or leaving large gaps between words and figures on a cheque you have written, which might allow a fraudster to alter the details.

  • You should write to your bank manager, explaining what makes you think the forgery has taken place. Enclose a copy of you bank statement and ask for the value of the cheque to be credited to your account. If the manager refuses to do so, ask to make a complaint using the bank’s official procedures. Again, if you are not satisfied with the outcome, you can approach the Financial Ombudsman Service.