Lloyds Reimburses Sarah £19,000 After Initial Refusal Over 13-Month Fraud Rule
A customer, identified as Sarah, has received a full reimbursement of GBP#19,000 from Lloyds Bank after falling victim to a sophisticated investment fraud. Initially, the bank cited a 13-month time limit for reporting scams, offering only GBP#1,000.
Reversal Follows Scrutiny
The reversal by Lloyds came swiftly after details of Sarah's case were brought to light. Sarah had transferred GBP#20,000 in October 2024 for what she believed was an ethical investment in social housing, undertaking due diligence by checking Companies House, the Law Society, and TrustPilot reviews. However, she only realised the scam in March 2026, well beyond the 13-month reporting window specified in new regulations.
Lloyds stated, “Upon further investigation of [Sarah’s] case, and taking into consideration the specific circumstances of her investment scam case, we've made the decision to further refund her the GBP#19,000.”
Call for Rule Review
The incident has intensified calls from National Trading Standards for an urgent review, reform, or removal of the 13-month reporting rule, which is part of the Payment Systems Regulator’s Mandatory Reimbursement Requirement, introduced in October 2024. Louise Baxter, head of the Scams Team at National Trading Standards, argues the time limit should commence from when a victim realises they have been defrauded, not from the last payment date, especially for long-running investment scams.
UK Finance, representing the banking sector, maintains that only a small proportion of cases fall outside this deadline. The Payment Systems Regulator has clarified that while a 13-month claim window exists, payment firms are expected to support customers appropriately and consider individual circumstances. Victims dissatisfied with their bank's resolution can refer their case to the Financial Ombudsman Service, which has no time limit for complaints and can order reimbursements up to GBP#455,000.
