Investment Scam Bank Refund — Can Your Bank Be Made to Pay?

If you were tricked into sending money to fraudsters through an investment scam, your bank may be legally required to refund you — even if you authorised the payment. The Payment Systems Regulator's mandatory reimbursement rules, effective October 2024, represent a major shift in bank liability for fraud.

Quick Answer: UK banks must reimburse victims of authorised push payment (APP) investment scams up to £85,000 within 5 business days under the PSR's mandatory reimbursement rules from 7 October 2024. UK Finance recorded £459.7 million of APP fraud losses in 2023. Source: PSR APP Fraud Reimbursement Rules 2024; UK Finance Annual Fraud Report 2024.

What Is an Investment Scam?

Investment scams typically involve fraudsters persuading victims to send money to what they believe is a legitimate investment opportunity — often promising high returns, celebrity endorsement or FCA registration. Common types include:

Boiler room fraud — cold calls from fake brokers selling worthless shares
Clone firm fraud — fraudsters impersonating real FCA-regulated firms
Ponzi and pyramid schemes — returns paid from new investor money, not real investments
High-yield investment programme (HYIP) fraud — unrealistically high return promises
Binary options fraud — now banned by the FCA but still operated offshore
Unregistered crypto exchanges — see our crypto scam page

When Is Your Bank Liable?

Under the PSR's mandatory reimbursement rules (effective 7 October 2024), banks and payment providers must reimburse victims of Authorised Push Payment (APP) fraud up to £85,000 per claim where:

The payment was made through the UK Faster Payments system or CHAPS
You were deceived into making the payment (authorised under false pretences)
You did not act with gross negligence

Banks can only reduce or refuse reimbursement in limited circumstances — for example, where the customer ignored specific, clear fraud warnings at the point of payment. Generic warnings do not count.

What If Your Loss Exceeds £85,000?

The PSR cap is £85,000 per claim. For losses above this, we can pursue the bank through the Financial Ombudsman Service (maximum award £430,000) or court proceedings for the full loss.

What If the Scam Happened Before October 2024?

Pre-October 2024 claims are governed by the Lending Standards Board's Contingent Reimbursement Model (CRM) Code, which applied to signatory banks from May 2019. Most major banks were signatories. For claims before May 2019, or against non-signatory banks, the FOS still has jurisdiction to order reimbursement where the bank failed in its duty of care.

Frequently Asked Questions

I authorised the payment — does that mean I can't get a refund?

No. APP fraud specifically covers payments you authorised under false pretences. The fact that you pressed 'send' does not mean you cannot claim — the question is whether you were deceived.

What if the bank says I ignored their warnings?

Banks must show they issued specific, targeted warnings about the type of scam you fell victim to. Generic fraud warnings printed on the transfer screen are generally not sufficient to defeat a claim.

Which banks are covered by the mandatory rules?

All UK payment service providers (PSPs) using Faster Payments or CHAPS — including every major high-street bank, challenger banks and building societies. Both sending and receiving PSPs share liability 50:50 under the PSR framework.

What if my bank refuses to reimburse me?

You can escalate to the Financial Ombudsman Service, which can award up to £430,000 and applies the PSR mandatory rules as binding. The FOS upheld 75% of APP fraud complaints in 2024/25.

Talk to us

Free, confidential assessment on 01228 272 395 or start your claim online. Related: APP fraud claims, crypto scam refunds, romance scam refunds.