Can a bank refuse to refund an unauthorized transaction?

The distinction that decides everything

Banks split fraud claims into two very different categories:

• Unauthorized transactions — someone else moved your money without your consent: a stolen card, a hacked account, a payment you never approved. In most jurisdictions (including the EU under PSD2 and Switzerland under standard banking terms), banks must generally refund these promptly unless they can show you acted fraudulently or with gross negligence.
• Authorized push payment (APP) fraud — you made the transfer yourself, but you were deceived about who you were paying or why. Investment scams fall here. This is where banks most often refuse, arguing the payment was "authorized" — even though it was authorized under false pretenses.

Knowing which category your case falls into tells you which arguments matter. Most rejected claims we see were argued in the wrong category.

When the bank must refund you

• The transaction was genuinely unauthorized and you reported it without undue delay (typically within 13 months in PSD2 countries).
• Your card or credentials were used after you reported them lost or stolen.
• The bank cannot demonstrate that its authentication was properly applied — weak or missing strong customer authentication shifts liability to the bank.
• You were the victim of a technical failure or processing error.

When the bank can lawfully say no

• You authorized the payment yourself, knowing who you were paying — even if the recipient turned out to be a fraudster (the classic APP scenario).
• The bank can evidence gross negligence — for example, sharing your PIN and one-time codes after explicit warnings.
• You reported the fraud outside the legal time limits.
• You acted as a "money mule", forwarding funds for others.

Note what is not on this list: being deceived by a professional scam is not, by itself, gross negligence. Banks sometimes imply it is. Courts and ombudsmen frequently disagree.

Your bank said no. Now what?

Rejection is the start of the process, not the end. Escalate in this order:

• 1. Request the rejection in writing, including the specific reason and the evidence relied on. Vague rejections often collapse under scrutiny.
• 2. File a formal complaint through the bank's official complaints procedure — this is a prerequisite for the next step and forces a documented review.
• 3. Go to the banking ombudsman or financial dispute-resolution scheme in your country (in Switzerland, the Swiss Banking Ombudsman; in the UK, the Financial Ombudsman Service). It's free, and a significant share of APP rejections are overturned there.
• 4. Pursue the receiving bank. The bank that hosted the fraudster's account has its own obligations — if it ignored obvious warning signs when opening or operating the account, that is a separate route to restitution.
• 5. Consider a professional claim. Cross-border cases with multiple institutions are where structured case work pays off most.

What strengthens a refund claim

• A prompt fraud report to the bank, with a case reference number.
• A police report filed close to the discovery date.
• Complete payment records: dates, amounts, and receiving accounts.
• Evidence of the deception itself — the fake platform, the chat history, the documents they sent you.
• A clear, consistent timeline. Contradictions are the most common reason legitimate claims fail.

If you haven't yet secured this evidence, start with our checklist for the first 48 hours after an investment scam.

The bottom line

A bank's "no" reflects its first classification of your case — not a final legal verdict. Refund rights vary by country and by how the payment was made, but rejected claims are overturned every day through complaints, ombudsmen, and pressure on receiving banks. The claimants who succeed are the ones who escalate methodically with documented evidence.

This guide is general information, not legal advice for your specific situation. For an assessment of your case — free, with no upfront fees — make a claim or contact the team.