Will HSBC Refund Scammed Money?

HSBC can refund money lost to fraud but is not obligated to do so in every case. The outcome depends on the transaction type, whether the client authorised the payment, the applicable reimbursement rules, and the speed of notification. For unauthorised transactions, HSBC initiates a dispute procedure with stronger prospects of recovery. For authorised push payment scams, new UK rules effective from October 2024 provide a reimbursement framework with a £85,000 claim limit. For card payments, the chargeback mechanism applies. Immediate notification to HSBC is the critical first step – the bank emphasises urgent phone contact as the fastest response channel for fraud cases.

When HSBC Is Obligated to Refund

The determining factor is how the transaction is classified. HSBC applies three distinct categories: unauthorised transactions where the client did not authorise the debit, card disputes where a card payment is contested through the chargeback mechanism, and APP scams where the client was deceived into sending money to a fraudster. Each category carries different refund obligations, different procedures, and different timelines. HSBC also draws a critical distinction between genuine scam cases and civil disputes – a payment to a real supplier that did not deliver goods or services is treated as a commercial disagreement, not a scam. This classification determines whether the client has access to fraud recovery mechanisms or must pursue a contractual claim.

Unauthorised Transactions

Where the client did not authorise or confirm the transaction, the chances of a refund are higher. HSBC directs clients to its dispute procedure through the mobile app or the bank’s online disputes tool. Under PSD2, the payment service provider is required to refund the full amount of an unauthorised transaction unless it can demonstrate gross negligence or fraud on the part of the client. A victim of a phishing attack or account takeover who could not have identified the breach through reasonable care is not considered to have acted with gross negligence. The burden of proving gross negligence lies with the bank.

APP Scam Reimbursement – New UK Rules

HSBC explicitly states that new rules for APP scam claims apply from 7 October 2024. The rules cover transfers between UK accounts made via Faster Payments and CHAPS. The general claim limit is £85,000. Where a claim is deemed eligible, HSBC must reimburse the client no later than 35 business days after the claim is submitted. Eligibility depends on the circumstances – the payment must constitute a genuine scam rather than a civil dispute, the client must not have acted with gross negligence, and the payment must not be a “me2me” transfer to the client’s own account.

Card Payments – Chargeback

For card transactions, HSBC uses the standard dispute and chargeback procedure through Visa and Mastercard payment schemes. The dispute is submitted through the bank’s dedicated disputes tool or the mobile app. A successful refund depends on the payment scheme rules and the facts of the specific case. Chargeback is available for unauthorised card transactions, non-delivery of goods or services, and material discrepancy between what was received and what was represented. The chargeback procedure is governed by payment scheme rules and does not require court proceedings.

When HSBC Refuses a Refund

HSBC refuses refunds in several documented situations. First – the bank determines that the case is not a scam but a civil dispute with a genuine supplier. If the client paid a real business but did not receive the expected goods, services, or digital content, HSBC treats this as a commercial disagreement outside the scope of fraud reimbursement. Second – the payment was a “me2me” transfer to the client’s own account rather than a direct payment to a fraudster. Third – the bank concludes that the client acted with gross negligence in authorising the payment. Fourth – the funds transferred via bank transfer have already been withdrawn from the recipient’s account and recovery has failed. A refusal by HSBC is not final – the client is entitled to escalate through the bank’s complaints procedure and subsequently to the Financial Ombudsman Service.

Immediate Steps After Discovering Fraud

Step 1 – Contact HSBC Immediately

HSBC recommends urgent phone contact as the fastest response channel for fraud cases. The primary number for UK customers is 03457 404 404. From abroad: +44 1226 261 010. For Premier customers: 03457 707 070. The bank’s mobile app and Live Chat are also available for contact. HSBC emphasises that the sooner the fraud is reported, the higher the probability of recovering funds before they are withdrawn from the recipient’s account.

Step 2 – Report to Action Fraud

In parallel with notifying HSBC, the client should file a report with Action Fraud – the UK’s national fraud reporting centre. Reports can be submitted online or by phone at 0300 123 2040. The Action Fraud report creates an official record that supports both the bank’s internal review and any subsequent law enforcement investigation. For suspicious emails, phishing emails, and scam text messages, HSBC directs clients to forward them to phishing@hsbc.com.

Step 3 – Preserve All Evidence

All correspondence with the fraudster, account details, payment confirmations, transaction reference numbers, invoices, website links, and phone numbers must be preserved without alteration. Screenshots of fraudulent websites and communications should be taken before the fraudster’s infrastructure is deleted. Digital evidence forms the foundation for HSBC’s dispute review, the chargeback procedure, and any subsequent regulatory or judicial proceedings.

Step 4 – Submit a Formal Complaint if HSBC Refuses

Where HSBC refuses the refund, the client should submit a formal complaint through the bank’s standard complaints procedure. HSBC must provide a final response. If the client is not satisfied with the outcome, the dispute can be escalated to the Financial Ombudsman Service. HSBC indicates that clients have up to 36 months to submit a claim for an erroneous transfer, but in scam cases immediate notification has the greatest practical impact on recovery prospects.

Alternative Recovery Mechanisms

Financial Ombudsman Service

Complaints about HSBC’s refusal to reimburse scam losses are regularly reviewed by the Financial Ombudsman Service. Published decisions show that outcomes depend on the classification of the case – APP scam, civil dispute, or me2me payment – as well as warning signs, the client’s actions, the speed of response, and the adequacy of HSBC’s fraud controls. Ombudsman decisions are binding on HSBC. Referral to the FOS is free of charge for the client.

Complaint to the Financial Regulator

HSBC is regulated by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the United Kingdom. A regulatory complaint does not return funds directly but initiates a supervisory review and creates regulatory pressure on the bank. Where systemic failures in fraud prevention or PSD2 compliance are identified, the regulator may require the bank to reconsider its position.

Civil Litigation

Civil proceedings against HSBC are available where a breach of PSD2 obligations is proven, Strong Customer Authentication was not applied, suspicious transaction patterns were ignored, or fraud notifications received an inadequate response. Civil proceedings against the fraudster are available in parallel where the fraudster is identified and their assets are located. The European Account Preservation Order (EAPO) enables the freezing of the fraudster’s assets across all EU member states simultaneously.

Criminal Proceedings

A criminal complaint filed with the relevant national cybercrime unit or through Action Fraud initiates an investigation in which law enforcement authorities gain access to bank records, IP logs, payment system data, and telecommunications operator records. Criminal investigation is the primary tool for identifying anonymous fraudsters and tracing the movement of stolen funds across jurisdictions.

HSBC Contact Details for Fraud Enquiries

HSBC operates a traditional banking infrastructure with phone support, mobile app, live chat, and a branch network. Head office: 8 Canada Square, London E14 5HQ, United Kingdom. HSBC UK customer service: 03457 404 404. From abroad: +44 1226 261 010. Premier customers: 03457 707 070. Phishing, suspicious emails, and scam texts: phishing@hsbc.com. Fraud reporting in the UK: Action Fraud – 0300 123 2040. Escalation of complaints: Financial Ombudsman Service.