Banks must treat fraud victims fairly, says FOS

Banks should not brush off their customers as being “grossly negligent” just because they have fallen victim to a scam, the financial ombudsman has said.

Caroline Wayman, chief ombudsman and chief executive of the Financial Ombudsman Service (FOS), said that with frauds becoming increasingly sophisticated it is “not fair to automatically call a customer grossly negligent simply because they’ve fallen for a scam”.

The FOS, which resolves disputes between consumers and financial firms, sees over 8,000 cases annually involving fraud and scams, including identity theft, fake banking websites and disputed cash withdrawals from ATMs.

The service said it regularly hears from

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banks that people who have been scammed have acted with gross negligence – and therefore banks are not liable for the money their customer has lost.

But the ombudsman service said there is a “very high bar” for being grossly negligent.

It said this is because of the increasingly sophisticated scams which fraudsters are using that are becoming harder for people to spot.

The service said banks should take into account the evolution and sophistication of frauds and scams and not simply assume that customers were grossly negligent.

But it also said that in some cases people should do more to protect their own money. For example, if someone has kept their PIN and bank card together or given their security details to someone else it would make it harder for them to claim any money back.