Banks must not automatically assume their customers are at fault if they're targeted by sophisticated scammers, the Financial Ombudsman Service has said.

Chief ombudsman Caroline Wayman has written in the organisation's publication, Ombudsman News, that the evolution of criminals' methods – in particular, their sophisticated use of technology – means it's an increasingly difficult case for banks to avoid refunding fraud victims by claiming they have been "grossly negligent."

She says that the Financial Ombudsman Service (FOS) will expect to see clear evidence that banks have investigated thoroughly – and have thought what more might have been done to protect their customers and their money – if it is asked to adjudicate on a dispute.

The warning comes as a new code of conduct to tackle a surge in so-called 'transfer scams' comes into force next month.

See our guide to the Financial Ombudsman for more details on the services it offers.

What are my rights if I've lost cash to scammers?

The financial regulator, the Financial Conduct Authority (FCA), says money can only be legally taken from your account if you have authorised the transaction – if you did not authorise a particular payment, you can claim a refund from your bank.

When your bank refunds an unauthorised payment it must also refund any charges and interest you have paid because of the unauthorised transaction.

Your bank can generally only refuse a refund for an unauthorised payment if:

  • It can prove you authorised the transaction – though your bank cannot simply say that use of your password, card or PIN conclusively proves you authorised a payment.
  • It can prove you are at fault – because you acted fraudulently or because you deliberately, or with "gross negligence", failed to protect the details of your card, PIN or password in a way that allowed the transaction.
  • You told your bank about an unauthorised payment 13 months or more after – the date it left your account, so make sure you contact the bank as soon as possible.

What does the Ombudsman say?

FOS chief executive Caroline Wayman said: "Each year we see more than 8,000 cases involving fraud and scams – everything from disputed cash withdrawals and identity theft, through to mobile phone Sim-swaps and fake banking websites. And where criminals are involved, both banks and their customers often tell us in strong terms that they haven't done anything wrong.

"But it's not fair to automatically call a customer grossly negligent simply because they've fallen for a scam. That's especially true in light of the sophisticated way criminals exploit banks' security systems – and convince customers that their money is at risk.

"We often remind banks that they need to support what they're saying with facts. And if they can't do that, it's likely we'll tell them to cover the money their customer has lost."

What do the banks say?

A spokesperson for UK Finance, which represents the banks, said: "Banks and building societies take the threat of fraud extremely serious and invest millions in advanced fraud prevention systems to protect customers, stopping £2 out of every £3 of attempted fraud last year. But we know there is more to be done.

"Banks will always make every effort to help a customer recover any stolen funds and the industry has introduced new standards on how banks respond to scam victims.

"At the same time our Take Five to Stop Fraud campaign is giving people the knowledge they need to stay safe and we are working with the Joint Fraud Taskforce to deter and disrupt the criminals responsible for these scams."