Bank Charge Scam

Bank Charge Scam

The phrase "bank charge scam" has had two lives. The first was a long running consumer campaign about whether high street banks were charging unfair penalties on unauthorised overdrafts and bounced payments. That fight is largely over. The second life, and the one most people need to worry about today, is a wave of fraud where criminals impersonate your bank and convince you that a charge, refund or fee needs your urgent attention. This article covers both, so you know what is still worth pursuing and what to ignore.

The old reclaim campaign: why it is essentially closed

For several years, customers reclaimed charges applied when accounts went overdrawn without permission, when direct debits were refused, or when cheques bounced. The argument was that the fees were penalties rather than a fair reflection of the bank's costs, and therefore unenforceable under consumer contract law. Thousands of claims were paid out while test cases were running.

That all changed when the Supreme Court ruled in the OFT v Abbey National case that the fairness of these charges could not be assessed in the way claimants had hoped. Since then, the major banks have refused to refund unauthorised overdraft charges as a matter of routine, and the regulator has shifted its focus to the structure of overdraft pricing going forward rather than refunds for the past.

If you receive an email, text, letter or call telling you that you are owed thousands of pounds in reclaimed bank charges from years ago, treat it as a scam. Routine reclaim of historic charges is no longer a realistic prospect. Anyone offering to recover those charges for a fee, especially one paid up front, is almost certainly trying to take your money or your bank details.

There is one narrow exception worth knowing about. If you believe your bank treated you unfairly because you were in financial difficulty, or charges were applied in a way that breached the bank's duty of care, you can still complain directly to the bank and then to the Financial Ombudsman Service if you are not satisfied. You do not need to pay anyone to do this for you.

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The modern bank charge scam

The current version of this scam works on the same nerve the old campaign played on: the suspicion that the bank has taken money it should not have. Criminals contact you claiming there is an issue with a charge on your account. The pretext varies. Sometimes it is a refund you are supposedly owed. Sometimes it is a fraudulent transaction they want to "reverse". Sometimes it is a fee you must pay immediately or lose access to your account.

The goal is always one of the following: to get you to read out a one time passcode, to move money to a "safe account", to install remote access software on your phone or computer, or to hand over card details and online banking credentials.

Red flags to spot

• An unexpected call, text or email about a bank charge or refund, especially one that pressures you to act within minutes.
• A request to move money to a different account "for safety", even if the new account is in your own name.
• Anyone asking for a one time passcode, full PIN, full online banking password, or the card reader codes used to set up new payees.
• Being asked to download software so the caller can "show you" the charge or "fix" your account.
• Promises of large refunds for historic bank charges in exchange for an up front fee or your bank details.
• Letters or emails with the bank's logo but a reply address that does not match the bank's normal channels.
• Caller ID showing your bank's name. Numbers can be spoofed and should never be treated as proof.

What to do if a charge on your account looks wrong

Genuine disputes do happen. Direct debits go out at awkward times, fees are applied that you did not expect, and sometimes a charge is simply an error. The secure approach involves careful verification and patience, which is exactly why scammers try to rush you.

• Log in to your banking app or online banking yourself, using the app you already have installed or by typing the address in fresh. Do not click links from messages.
• Check the transaction history and any messages in the app's secure inbox.
• If you need to speak to the bank, use the fraud or customer services number printed on the back of your debit card, or the number listed inside the app.
• If you have been pressured by a caller, hang up, wait a few minutes so the line clears, and call your bank back from a different phone if you can.
• Keep notes of any conversations, including the date, time, the name the caller gave, and what they asked for. Save screenshots of suspicious texts and emails before you delete them.
• If you are unhappy with the bank's response after a formal complaint, you can escalate free of charge to the Financial Ombudsman Service.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

If you think you have already been caught

• Contact your bank straight away using the number on your card. Tell them what happened and ask them to freeze cards, stop pending payments and review recent activity.
• Change your online banking password and any other passwords you may have shared or typed while remote software was running.
• If you allowed someone to install software on your device, disconnect it from the internet and have it checked by a reputable IT professional before logging back into anything sensitive.
• Gather everything you have before you report: dates, times, amounts, account numbers, phone numbers, screenshots, and copies of any messages or emails.
• Report the scam to Action Fraud at actionfraud.police.uk, or to Police Scotland on 101 if you are in Scotland.
• Forward suspicious texts to 7726 and suspicious emails to report@phishing.gov.uk.
• Speak to Citizens Advice if you need help working out next steps, particularly if money has gone missing and you are not sure how the bank will treat the claim.

The short version

Routine reclaim of unauthorised overdraft charges is no longer a live route, and anyone telling you otherwise is likely selling something suspicious. Modern bank charge scams use the language of fees and refunds to panic you into handing over access to your account. Slow down, use the bank's own app or the number on your card, and report anything suspicious to Action Fraud. For up to date guidance on consumer rights and scam policy, check GOV.UK.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Scam Detector lets you got a text, call, email or offer that feels off? Paste it in below and we will tell you how scammy it looks, the warning signs to spot, and exactly what to do next. Try it now →