Can you run into debt by £1000s if a thief uses unarranged overdraft?

Conrad3000

Hi all.

If you lose your debit card, can someone use it to put you in debt by £1000s?

I recently had an unarranged overdraft by a few pounds but it got me thinking; can a thief literally spend, say £5000 and the bank will let it go through?

Or even a few £100s?

Shocking if true.

Thanks.

eskbanker

Once you notify your bank that the card is lost or stolen, then you're not liable for anything that happens thereafter.

soolin

I’m not sure about thousands being possible unless the card owner is unaware of the loss and has poor security. As it stands a spend of up to £100 without entering a pin is possible but after a certain amount of taps the card won’t work unless a pin is entered in the terminal. Also there is the issue that without funds in the account to cover a hold the payments will start to fail quite quickly.

However as eskbanker said the liability stops as soon as the card owner reports the loss.

booneruk

Isn't it down to whether you've been negligent?

I remember years ago I fell for one of those scams at the cashpoint late one evening where someone had installed a device to retain cards. The guy standing behind me shoulder observed my pin number, retrieved the card and went on a spending spree overnight. Thankfully the bank fully refunded me the next day after I realised what had happened and reported it.

However, these days I'm 99.9% Google pay for everything via my mobile. Never once have I had one of these tech meltdowns stopping me from completing a transaction that many seem to be terrified of.

eskbanker

Yes, negligence comes into it - even prior to reporting a card lost or stolen, the bank must refund any payments that you didn't authorise, unless you were complicit or negligent:

In an unauthorised payment claim, your bank can only refuse to refund you if:

You authorised the payment, or

You acted fraudulently, or

You failed to protect the details of your card, PIN or password in a way that allowed the payment. 

https://www.fca.org.uk/consumers/fraudulent-payments

The onus is on the bank to prove that you did authorise a payment rather than you having to show that you didn't…

Conrad3000

Thanks guys.

And what if you realised a few hours later that you'd lost your card and a 3rd party went on a spending spree?

Is there a limit on how quickly you must tell the bank?

Would 12 hours be too late? For example, if the card went missing in the morning and you only found out later on in the evening, would that be within 'satisfactory' grounds to be reimbursed?

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82175724#Comment_82175724

It's obviously in your interests to notify as soon as you find out, but, as above, even prior to notification you're not necessarily on the hook for transactions you didn't make, subject to the stated criteria (rather than some sort of arbitrary time window).

beckstar1975

an acquaintance at uni had her card stolen by a 'friend' who did exactly this (knowing her pin having been with her many times at the ATM). the money was refunded when shop/bank cctv proved the person using the card was not the person the card belonged to.

This was before online shopping which may make things easier for the thief (unless you have 2FA on)

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6687530/can-you-run-into-debt-by-1000s-if-a-thief-uses-unarranged-overdraft

Transactions done by unverified contactless the bank is liable unless they can prove gross negligence or fraud by you.

If they have your pin number or can pass 3D Secure questions to be able to order online then matters get more complex and you will have to explain how a thief that swiped your card managed to also get your pin etc.

Most banks are still limiting contactless to £100 and counter fraud measures are looking for unusual transaction patterns so to run up thousands means doing 20+ contactless transactions which almost certainly will have triggered the need to insert the card and then they fall at not knowing the PIN

Chief_of_Staffy

When you deposit money into the bank that money now belongs to the bank. It is a loan. In doing so you enter into an agreement with the bank that they pay you, or a nominated payee, funds to the value of, on request. If a criminal accesses your account then the money they steal is the bank's, not yours. However, if you are deemed culpable for the loss in that you've been grossly negligent or complicit in criminality, then the liability is transferred to you, and you will see that amount permanently deducted from your balance.

Eco_Miser

https://forums.moneysavingexpert.com/discussion/comment/82177617#Comment_82177617

The money may be the bank's, but if a criminal successfully impersonates you (eg by using your card) the bank believes it has repaid you some of the loan in accordance with the agreement and reduces the credit on your account. You then have to tell the bank that that is not the case and go through the process to determine culpability.