Am I Responsible for Transferring Scammed Money? What Should I Do?

Question from 123, Am I Responsible for Transferring Scammed Money? What Should I Do?

Answer from AI:

What the law says

In the United Kingdom banks must protect customers from fraud and are subject to the Payment Services Regulations 2017 and the Anti‑Money‑Laundering (AML) Regulations.
When a transaction is flagged as potentially linked to a credit‑card scam, a bank is entitled to freeze the account while it investigates. The purpose is to prevent further loss and to comply with reporting duties to the National Crime Agency and Action Fraud.

Are you at fault?

You transferred £800 to a friend who later turned out to be involved in a scam. The key legal question is whether you acted recklessly or negligently:

• If you had no reason to suspect fraud – for example, the friend asked for the money in a normal, personal context and you had no warning signs – you are generally considered a victim of the scam. In that case the bank’s freeze is a precaution, not a penalty.
• If you ignored clear warnings (e.g., the friend asked for money to pay a “credit‑card debt” in exchange for a promised return, or you received suspicious messages) you could be seen as negligent. Negligence may affect whether the bank can recover the funds from you.

Why the bank is asking for proof of payment

Nationwide needs to verify:

1. Who sent the money – to confirm it was you and not an unauthorised third party.
2. The purpose of the transfer – to assess whether it fits a legitimate personal transaction or a typical scam pattern.
3. The source of the funds – to satisfy AML checks that the money was not derived from illegal activity.

Providing bank statements, a screenshot of the transfer confirmation, or any written communication with the friend will help the bank complete its risk assessment.

Practical steps you should take

1. Gather documentation

   • Bank transfer receipt or screenshot.
   • Any messages (texts, emails, WhatsApp) that show why the friend asked for the money.
   • Proof that the £800 originally came from the mutual friend who gave it to you (e.g., a receipt of the first transfer).

2. Contact Nationwide promptly

   • Use the dedicated fraud or investigations phone line rather than the standard customer‑service number.
   • Explain the timeline clearly: how you received the money, why you transferred it, and when you learned it was a scam.
   • Ask exactly which documents they need and the preferred format (PDF, scanned copy, etc.).

3. Report the scam

   • File a report with Action Fraud (the UK’s national fraud‑reporting centre). This creates an official record and may aid the bank’s investigation.
   • Keep a copy of the Action Fraud reference number for future correspondence.

4. Seek independent advice

   • If you feel the bank is being unreasonable, you can raise a formal complaint with Nationwide’s complaints department.
   • Should the issue remain unresolved, you may approach the Financial Ombudsman Service for an independent review.
   • For personalized legal guidance, consult a solicitor experienced in banking or fraud matters.

Possible outcomes

• Reimbursement – If the bank concludes you were an innocent victim and you have supplied the required evidence, the regulations usually require the bank to refund the frozen amount.
• Partial liability – If the investigation finds you were negligent (e.g., you ignored obvious red flags), the bank may recover some or all of the £800 from you.
• Continued freeze – The bank may keep the account frozen until the investigation is complete, which can take several weeks.

Where to find more information

• Financial Conduct Authority – Payment Services Regulations 2017 – a summary of the rules that protect consumers from unauthorised payments.
• Action Fraud – Reporting a fraud – guidance on how to report scams and what information to provide.

These resources give a broader view of your rights and the bank’s obligations, but they do not replace tailored advice from a qualified legal professional.