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Victim of Card fraud - Bank says we as a business are responsible. Please help!

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I am writing is in the hope that someone who has had a similar experience may be able to help us.


We run a small family owned retail store in the UK.


In February we received a call from a man who wanted to buy a high quantity of produce from us.


Taking orders over the phone was a normal occurrence for us as


our handheld streamline device allows us to do so if the customer giving the relevant security details

ie: number in the address and postcode, D.O.B etc.


We had no reason to suspect this was a fraudulent transaction as the card details went through successfully

and the 'customer' picked up his order later that day.


We heard nothing more about this case until


the beginning of June when we received a letter from First Trust bank stating that there had been a query with the transaction back in February

and that First Trust would be removing the money from our account.


There was nothing in the letter stating that the transaction that had taken place in February had been fraudulent.


It wasn't until we rang First Trust that an advisor told us the card that had been used was stolen and that we were responsible,


since then we have been to the police,

our local bank branch and

we have contacted the customer help line several times and

after being transferred numerous times we have gotten nowhere

as we are being told it is nothing to do with the bank

and that we are somehow responsible.


If anyone can advise us from a similar experience they have had with the banks we would be extremely grateful.


We do not believe it is right that the banks can take that money from our account (nearly £1000)

plus charge us a fee of £75 to do so,


we also do not believe we can be liable if all security was passed by us over the phone

and the details came back as verified to allow us to carry out a transaction

over the phone via the banks streamline device.


If anyone knows of any agencies that we can seek advise from on this matter it may also be very helpful


Thank you for taking the time to read this



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I completely agree with you. It is grossly unfair and I shall be very surprised if you are not able to challenge this successfully.


It will probably be quite difficult and you will have to be very persistent. Also, be aware that once you start to try and make trouble for the bank, they may well retaliate and make trouble for you. You can't imagine what pigs these people can be.


This means that if you have any loans, mortgages or any other liabilities outstanding with the bank, you need to bear it in mind. One of the problems here is that you are not dealing with one of the mainstream high profile banks. Your bank is not so much in the public eye and say they are probably used to dealing with their customers in a more peremptory way if it suits them.


First off, are you recording your calls? I'm quite sure the answer is that you are not. Get yourself a call recorder. From Amazon you can buy yourself a decent digital recorder for 30 or £40 and also a cheap recording accessory – Olympus TP7. Practice using it and make sure you're comfortable with it. It is very easy and it will record calls from any device whether it's mobile or landline. Whenever you are dealing with your bank – or frankly any other organisation, you should record your calls..


Secondly, I think that you should make a very detailed chronological account of everything that has happened so far. Get yourself a dedicated exercise book for this and keep a log/diary of events. Include in this every conversation and notes of every phone call – even though they are recorded.


You don't appear to have written to the bank about this.


Start off by making a formal complaint about what has happened and the way you have been treated. Tell them that you want the matter to go to the ombudsman.


Ask them specifically to address the questions – in what way do they consider that you have been responsible, in what way do they consider that you may have breached the procedures and on what particular terms and conditions are they relying as the basis for the refusal to indemnify you for the loss.


Point out that it is they who are the victims of fraud and not you.


In the meantime, please read up about BCOBS and also have a look at the FCA Know Your Rights guide.

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Do not get bogged down in the banks complaint procedure.


Remain in control and do not rely on their deadlines. The bank will have a complaints procedure in place which is calculated to divert you and to tire you out.


You must remain firmly in control by recording calls. Trying to impose your own deadlines, and if the bank misses a promise or a deadline then you react immediately. Do not for a moment imagine that their complaints process is intended to help you. It is not. It is only intended to help them and try and keep you away from making formal complaints against them.


Keep in close contact with us every step of the way

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So First Trust Bank provide your merchant services (which includes things like being able to accept card payments)?


Merchants are liable in cases of fraud and it's normal for them to pass on this liability to their users - so whether you're liable depends on what arrangement you have with First Trust.

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Normal is not the same as lawful or fair.


I see particular parallels with the telephone companies which force their customers to reimburse them for the costs incurred by thieves who claim their Sim cards and then use them for international premium rate numbers.


I think that this is worth challenging – and if it is normal practice then it needs to become normal to challenge it. I suppose many merchants end up giving up because they are simply not big enough to stand up to the banks and also because the sake of their business they have to remain acquiescent to the banks normal industrial practice.

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There's nothing unlawful about it - it depends on the arrangement the OP has with the First Trust.


It would be useful to know whether the transaction was online and whether an authorisation was obtained because this wouldn't have happened if the card was marked as stolen at the time.

Retailers have to be very careful that they follow the correct procedure when taking card transactions. There are also plenty of measures available to minimise the risk of fraud.


Banks aren't the only providers of merchant services though - I'm not trying to be rude BankFodder but I don't think this is your area of expertise. Your comments are likely to end up being counter-productive for the OP.

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No offence taken. However whether it is a bank or some other supplier, the rules are the same and the approach should be the same. I'm afraid that simply saying is "normal" is very unhelpful and simply encourages a culture of acceptance of this normality.


I don't hold out expertise in this area, but on the other hand I hope that we encourage a feisty and challenging attitude on this forum, because that is what it takes.


Just like the mobile phone industry, we have another dominant industry which is able to reimburse itself the proceeds of crime. I doubt whether there is any legal basis for this other than maybe some contractual term contained in a standard-form contract designed and implemented and controlled by a dominant partner.


I think a challenging and questioning attitude is the correct way to go and is likely to be productive rather than counter-productive

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Yeah fair enough, you definitely should challenge what you think is wrong and it's good that this forum and it's members do encourage that!


I'm not trying to detract from that but unless there is more to this case I can't see the OP getting the outcome they want.


It's up to retailers to choose whether they participate in a transaction and that means they are also responsible if it goes wrong. They should factor these losses into their pricing and ensure that they utilise all the reasonable tools available to minimise the risk of fraud (and hopefully that is helpful advice for the OP in the future).

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I think that as the better-loss-bearer, it is the card providers who should be factoring it into their pricing.


It is the card providers who are better placed to put proper security measures in place and to develop their technology to withstand criminal attacks. Ensuring that the buck stops with them and that they accept that they are the victim of the criminality will encourage them to invest to put those systems in place.


Allowing the buck to be passed to a small business provides no incentive to the only party which is able to improve the systems. It discourages investment because why erode the profit margin when you can make someone else pay the price.

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I think there's a flaw in your understanding of the card transaction process here.


The card issuers (or card providers as you have called them) are the organisations that give consumers our VISA debit cards and the like.

The acquirer is the organisation that processes transactions on behalf of retailers.

With card transactions the acquirer interfaces with the card issuer using the relevant card association (VISA, MasterCard) networks.


The acquirers and the card associations do have security measures in place. But it's up to the retailer to follow the correct procedures and employ the available fraud-prevention measures.


The law gives consumers protection from unauthorised transactions.

If the acquirers foot the bill for these unauthorised transactions then what incentive is the for retailers to follow the correct procedures.


But don't forget that not all retailers will want to employ all the fraud-prevention measures either. Amazon, for example, will sacrifice some of these security measures to make the buying process quicker - the reasoning being that even though their losses due to fraud will be greater, they will get more sales and offset these losses.

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Thank you for clarifying the mechanism. I don't really see that it makes much difference. The fact is that I don't think that the merchant should be the loser – but I agree that they must follow the correct procedures.


Is there some indication here that they haven't followed the correct procedures?


If the merchant has followed the providers rules then I don't really see that there is any basis for them being required to indemnify the provider for losses to them caused by criminal enterprise.


The incentive of course is that where the procedures haven't been followed then maybe there would be some liability for the merchant – and certainly there is the threat of removal of the service completely – which could be devastating to a small business or any business.


It is the provider who is able to understand what the patterns of fraud are, and the mechanisms being used because they have the overview and they have the statistical resources. They also have the financial resources. But in any event, I don't understand any basis in law where they can recoup their criminal losses from a third party. As I have already said, the mobile phone industry also does exactly this. I wonder what the contractual provisions of both industries actually say.

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Even when customers are 100% in the right, banks still make them go through hoops, banks think they can do no wrong. Banks try to grind customers down. They have a 'we don't want to know approach to customer issues', banks are comparable to 'Delboy', PPI as an example.

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In post 1# the OP states that all the verifications came back OK and the transaction was allowed, it would seem the trader/merchant has all that is required indeed all that was possible to verify ID etc.

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