Massive chip and pin theft

AngelaSinclair · 2 May 2009 at 12:26PM

I'm having a horrible time with HBOS trying to sort out the fraud claim against a massive chip and pin theft that's occurred. I was out at a bar on Saturday night and made my last transaction just before midnight to buy and drink for myself and a friend. The next day, in the afternnon, I went into my purse to get my card to pay for some lunch and I realized it wasn't there. I checked my online account and it was showing that £300 had been withdrawn at an ATM.

I called the bank immediately and reported the card stolen. The girl was really helpful, told me she was seeing at least £1500 worth of transactions on my account and that she'd cancel the card straight away. As it was a Sunday she couldn't put me through to the fraud team - they work usual office hours - but reassured me that I would be able to get emergency funds and that I'd be reimbursed for the theft.

The next day I called the bank to carry out the fraud claim. The chap on the phone was extremely rude and disbelieving of my story. He asked for all the details to put the form into the fraud team. I followed this up the next day with a call to the fraud unit. They confirmed a claim was with them and said it would take a few days for the case to be looked at. They gave me more details on where the money was spent, following that I got a print out of the transactions from the bank so I was in possession of as much information as possible.

By Tuesday night I received a paper free letter from the bank saying that I had gone over my overdraft limit - at the time I was £238.00 overdrawn, following the theft the overdraft stands at £2225 which is £725 over my available overdraft limit anyway. The bank were now saying I'll be charged for going over the limit on each transaction and also a one off charge for being unauthorised by the bank to be overdrawn.

I was worried as it seemed that no attention was being paid to the fact that my account had had over £1760 stolen from it in the space of a few hours. I arranged an appointment with my local branch where the confirmed there was no note of any fraud claim on my account. The manager was helpful and said he'd look into it. But as soon as he realized my pin AND card had been stolen - that it wasn't a cloning case - he started to clam up. All the same he said he'd follow things up.

To make matters worse I also received a letter from the police saying they'd not be investigating the crime.

Yesterday I called the bank manager to see how he'd gotten on in chasing things up. He was extremely shirty with me and said that no fraud claim had been registered so things were only underway now. I'm still not sure that's true. When I asked him about emergency funds he said "Well you've no available funds, you're over your overdraft limit so you'll just need to tell your creditors you cant pay them [landlord, credit card, mobile phone bill] and borrow some money from someone else".

The fact is I have nowhere I can borrow from - my parents aren't flush, I've borrowed £60 from a work colleague on Monday but I'm terrified to borrow more incase they drag this out and don't find in my favour. I've got £6.00 left in cash and that's all I have access to. This is a nightmare and I just don't know what to do from here.

If the fraud unit don't find in my favour,not only do I lose the money I lost from my account, they'll make me responsible for the whole amount and the charges.

Any advice?

opinions4u · 2 May 2009 at 2:13PM

But as soon as he realized my pin AND card had been stolen - that it wasn't a cloning case - he started to clam up

While I am sympathetic to your situation, how did they manage to steal your pin?

masonic · 2 May 2009 at 2:24PM

Even if the fraud unit don't find in your favour, they can only make you pay the first £50 of your overdraft arising through the fraud. You are protected against liability for the rest by the Consumer Credit Act.

opinions4u · 2 May 2009 at 2:29PM

masonic wrote: »

Even if the fraud unit don't find in your favour, they can only make you pay the first £50 of your overdraft arising through the fraud. You are protected against liability for the rest by the Consumer Credit Act.

If the customer has been negligent, they could be liable for the full amount.

masonic · 2 May 2009 at 2:32PM

opinions4u wrote: »

If the customer has been negligent, they could be liable for the full amount.

As I understand it, that only applies if the customer is in credit. The CCA states that customers are are liable only if they made the transaction or authorised it themselves - otherwise their liability is limited to the first £50. Of course, the CCA only applies to overdrawn bank accounts.

opinions4u · 2 May 2009 at 2:45PM

The Banking Code:

10.3 If we confirm a transaction is unauthorised, we will
refund any interest charged, unless you have acted
fraudulently or without reasonable care (see under
sections 12.5 and 12.11).

12.5 • Try to remember your PIN, password and other
security information, and securely destroy the
notice as soon as you receive it.
• Never write down or record your PIN, password or
other security information.

Liability for losses
12.11 If you act fraudulently, you will be responsible for all
losses on your account. If you act without reasonable
care, and this causes losses, you may be responsible
for them. (This may apply, for example, if you do not
follow section 12.5 or 12.9 or you do not keep to your
account’s terms and conditions.)

That said, a little Googling found this story:

http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=430362&in_page_id=7

The key paragraph being:

"'Because Miss G's account was overdrawn, the transactions had been made from credit. This meant that the relevant provisions of the Consumer Credit Act 1974 applied.' Because the Act is a statutory safeguard for consumers, it takes precedence over the Banking Code. "

Interesting stuff!

masonic · 2 May 2009 at 2:51PM

The Consumer Credit Act is a law. It offers statutary rights that cannot be overridden by the banking code. The relevant sections are as follows:-

Section 83

83. Liability for misuse of credit facilities.
— (1) The debtor under a regulated consumer credit agreement shall not be liable to the creditor for any loss arising from use of the credit facility by another person not acting, or to be treated as acting, as the debtor’s agent.
(2) This section does not apply to a non-commercial agreement, or to any loss in so far as it arises from misuse of an instrument to which section 4 of the M1 Cheques Act 1957 applies.

Section 84

Misuse of credit-tokens.
84. — (1) Section 83 does not prevent the debtor under a credit-token agreement from being made liable to the extent of [F1 £50](or the credit limit if lower) for loss to the creditor arising from use of the credit-token by other persons during a period beginning when the credit-token ceases to be in the possession of any authorised person and ending when the credit-token is once more in the possession of an authorised person.
(2) Section 83 does not prevent the debtor under a credit-token agreement from being made liable to any extent for loss to the creditor from use of the credit-token by a person who acquired possession of it with the debtor’s consent.
(3) Subsections (1) and (2) shall not apply to any use of the credit-token after the creditor has been given oral or written notice that it is lost or stolen, or is for any other reason liable to misuse.
...

the_annoyed_customer · 2 May 2009 at 3:28PM

QUOTE=AngelaSinclair;discussion/1663689]

Yesterday I called the bank manager to see how he'd gotten on in chasing things up. He was extremely shirty with me and said that no fraud claim had been registered so things were only underway now. I'm still not sure that's true. When I asked him about emergency funds he said "Well you've no available funds, you're over your overdraft limit so you'll just need to tell your creditors you cant pay them [landlord, credit card, mobile phone bill] and borrow some money from someone else".

QUOTE]

The bank manager unfortunatly can't help you as apparently its precedure for only the people involved in the case to know what's going on. But yeah he still should have been nicer. As for going over the overdraft I would put in a separte claim to try and get the fines refunded sooner rather than waiting for the bank to finish its 'investigation'

James · 2 May 2009 at 4:23PM

Which? (formerly the Consumers Association) at last are looking at cases such as yours where a PIN has been used to authorise a fraudulent transaction.

In theory the Banking Code 12.12(as previoussly stated) says unless we can show that you acted fraudulently or without reasonable care etc etc. the most you will have to pay is £50.

The bad news is it seems that the Financial Ombudsman Service, based on probability are finding in favour of the Banks.

You might find it worthwhile clicking on the link below and sending an email to WHICH?

Click here.

Good luck.

Note: There are lots of ways of capturing someones PIN

Tip: Change your Credit Cards to Chip & Signature - NO PIN = NO LIABILITY for FRAUD.

charliedavis · 2 May 2009 at 4:41PM

James wrote: »

Tip: Change your Credit Cards to Chip & Signature - NO PIN = NO LIABILITY for FRAUD.

Is this possible, not heard that before?

Full sympathy to the OP, hope you get it sorted ASAP. Good luck, let us know how you get on.

masonic · 2 May 2009 at 4:58PM

charliedavis wrote: »

Is this possible, not heard that before?

It is possible to get these. They are intended for people not able to remember/use a PIN. You may not be able to use your Chip & Signature card for cash withdrawals, though. However, to get around that you could open one of the few savings accounts that come with a card for cash withdrawals (keeping the balance of the savings account as low as possible). With an approach like that you can get the best of both worlds.

Massive chip and pin theft

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