Consumer group Which? has issued a warning about a 'dangerous' new form of card fraud that is sweeping the UK, where criminals trick people into approving scam card payments. The group cautions that banks might not reimburse victims, as these payments fall outside automatic refund protections.
How the scam works
Fraudsters are increasingly persuading victims to approve card payments, a tactic that extends beyond traditional authorised push payment (APP) fraud, which involves manipulating victims into sending money by bank transfer. In this new variant, scammers may convince individuals to share one-time passcodes (OTPs) to add their card to a digital wallet, enabling a contactless spending spree.
Typically, fraudsters cold-call victims while posing as bank security staff, police, or the financial regulator. They claim the account is under attack and urge the victim to approve card payments or share one-time codes to 'block' or 'reverse' the supposed fraud.
Complaints data reveals low refund rates
The Financial Ombudsman Service (FOS) received 3,653 complaints about authorised card payments in the year analysed by Which?. On average, only 27% of these complaints were upheld in favour of consumers. Revolut topped the table with 912 cases, far ahead of second-place Barclays with 399.
Lisa Webb, a consumer law expert at Which?, said: "This is a particularly dangerous scam since card payments fall outside of the automatic refunds that banks are obliged to provide for authorised push payments." She advised victims to "always raise a claim with your card provider and escalate to the Financial Ombudsman Service if needed, providing full details of how you were manipulated into approving the payments."
Industry and regulator response
A UK Finance spokesperson commented: "Fraudsters use a wide range of tactics to trick people, including impersonating banks and well-known organisations to bypass security checks such as one-time passcodes." They added that criminals often research targets in advance, using details harvested from scams, social media, and data breaches.
The spokesperson urged the public to "stay alert and never share sensitive information – including one-time passcodes – with anyone other than a service you were expecting to hear from." They also advised: "If you receive an unexpected call from someone claiming to be your bank, hang up and call back using the number on the back of your debit or credit card."
Patrick Hurley, ombudsman director at the Financial Ombudsman Service, noted: "Being the victim of a fraud or scam can be deeply distressing, and sadly for many people the financial implications can be life-changing." He confirmed that the service continues to receive hundreds of cases a week from fraud victims, adding: "Anecdotally, we are seeing more cases where people inadvertently use their debit or credit card to pay a fraudster or are persuaded to initially move money to other accounts that are in their name. Those consumers may have less recourse under the rules and regulations."
Hurley advised consumers who have been scammed to speak to their bank first, and if they feel they have not been treated fairly, to contact the free and independent service for help.
