This guide is maintained as a current resource for November 2026 and covers only the laws of England and Wales. Information is for general guidance, not legal advice. Consult a qualified solicitor for advice specific to your situation.
Found an unknown transaction? Learn your rights under the Payment Services Regulations, how to trigger chargebacks, and the steps to recover your money through your bank or the Financial Ombudsman.
Unauthorised payments - where money leaves your account without your consent - can be alarming and costly. In the UK, consumers have important legal rights and practical steps they can take to challenge such payments and seek refunds. This guide explains the law, your rights, common dispute routes, relevant time limits, typical outcomes, and how to act effectively if you notice a transaction that wasn't authorised or agreed.
What Counts as an Unauthorised Payment?
An unauthorised payment generally means money has been taken from your bank account, debit/credit card, or other payment service without your permission. This can happen when:
- A fraudster uses your card or online banking details without consent.
- Someone uses your identity to make purchases or transfers.
- A payment is taken in error or where there is a dispute over whether consent was given.
Legally, the Payment Services Regulations 2017 (PSRs) set the baseline for how banks and payment service providers must handle unauthorised payments and refunds.
Your Legal Rights: Banking and Payment Services
Contact Your Bank or Payment Provider Immediately
If you spot an unauthorised transaction, contact your bank straight away. Prompt action improves your chances of recovery and ensures you meet important notification deadlines.
Under the PSRs, banks must refund unauthorised transactions unless they can prove you authorised the payment, acted fraudulently, or were grossly negligent in safeguarding your details.
Refund Timescales
- Once you report an unauthorised payment, your bank should refund the money by the end of the next business day in most straightforward cases.
- You may also be entitled to compensation for interest or charges lost because of the unauthorised transaction.
Exceptions: When Refunds Can Be Refused
A bank can refuse a refund if:
- You consented to the transaction.
- You provided your card details or password to someone and that person made the payment.
- You failed to keep your PIN or online banking credentials secure.
For credit card purchases, the bank's ability to refuse a refund is more limited in straightforward fraud cases.
Types of Disputes and How They Work
There are different mechanisms depending on how the payment was made:
1. Unauthorised Bank or Online Payments
If money leaves your bank account without your instruction, you can report this as an unauthorised payment. The bank will investigate under the PSRs and should refund you unless there is clear evidence of your consent or negligence.
2. Direct Debit Disputes
Direct Debits are protected by the Direct Debit Guarantee. If an organisation takes a payment that you didn't authorise or that is incorrect, you are entitled to a full refund from your bank.
3. Credit or Debit Card Payments: Chargeback and Section 75
Independent of fraud law, you may be able to recover money using card-specific protections:
- Chargeback: This is a voluntary scheme under card network rules (Visa, Mastercard, etc.) that allows banks to try to reclaim a payment from a merchant when something goes wrong - eg where you did not receive goods, they were defective, or the payment was unauthorised. Chargebacks usually must be requested within around 120 days of the payment.
- Section 75 of the Consumer Credit Act 1974: If you paid by credit card for goods or services and there's been a breach of contract or misrepresentation, the credit provider can be jointly liable with the retailer for losses between £100 and £30,000.
These remedies are separate from unauthorised payment claims under the PSRs and can be useful when fraud is less clear-cut.
4. Authorised Push Payment (APP) Fraud
APP fraud occurs when a consumer is tricked into sending money to a fraudster's account - for example under false pretences. From 7 October 2024, banks and payment service providers in the UK must reimburse eligible sums up to a set limit, usually within a fixed period, unless they can show the consumer was careless.
Making a Formal Complaint
If your bank refuses a refund and you believe this is incorrect:
- Follow Your Provider's Complaint Procedure
Submit a formal complaint in writing to the bank or payment provider. Keep records of all correspondence. - Contact the Financial Ombudsman Service (FOS)
If you don't receive a satisfactory response within eight weeks, or the response still leaves you dissatisfied, you can take your complaint to the Financial Ombudsman Service. This independent body can investigate and make binding decisions on disputes involving unauthorised payments, scams, and mishandling by financial firms.
Time Limits You Must Know
- Bank refund claims for unauthorised payments: Typically within 13 months of when the payment was taken.
- Chargeback requests: Often must be made within 120 days from the transaction date, although specific card networks' rules may vary.
- Section 75 claims: No strict statutory deadline, but practical timeframes apply and earlier action increases the chance of success.
Practical Steps to Dispute an Unauthorised Payment
- Check your account statements regularly and note any transactions you don't recognise.
- Contact your bank or card issuer immediately by phone and follow up in writing.
- Gather evidence such as screenshots, communications with the merchant, and transaction references.
- Ask for the transaction to be investigated under the appropriate regime (unauthorised payment claim, chargeback, or Section 75 claim).
- Escalate to a formal complaint if the bank refuses your claim.
- If unresolved, seek help from the Financial Ombudsman Service.
Risks and Considerations
- Not every dispute will succeed. If you authorised a payment - even to a scammer - banks may not refund unless it meets APP reimbursement criteria.
- A bank may require proof of your actions and security precautions you took to protect your account.
- Disputes that relate to disagreements over the quality or performance of goods or services (rather than fraud) may be treated differently and often fall under contract law or card protection schemes.
Key Takeaways
Consumers in England and Wales have strong legal protections against unauthorised payments under the Payment Services Regulations 2017 and related banking rules. If you spot an unauthorised transaction:
- Report it immediately to your bank or card issuer.
- Understand the mechanisms available - unauthorised payment claims, chargebacks, or Section 75 claims.
- Keep records and escalate to a formal complaint if necessary.
- If unsatisfied, bring the dispute to the Financial Ombudsman Service.
Acting promptly and following the correct procedures significantly improves the chances of recovering your money while ensuring financial service providers comply with their legal obligations.
