A consumer who lost £20,000 to a sophisticated investment fraud has successfully recovered her funds from Lloyds Bank, following an intervention by BBC Radio 4’s Money Box. The case has intensified calls for an urgent review of the 13-month reporting deadline for scams, a rule critics argue fails to adequately protect victims of complex financial deception.
nn
Sarah, whose identity has been protected, fell victim to an investment scam in October 2024, believing she was making an ethical investment in social housing. Despite conducting what she described as “all the due diligence,” including checking with Companies House, the Law Society, and TrustPilot reviews, the fraudulent nature of the scheme only became apparent to her 17 months later, in March 2026.
nn
Upon discovering the fraud, Sarah reported the incident to Lloyds Bank. Initially, the bank informed her that due to a 13-month time limit on reporting scams, only £1,000 of her stolen funds would be refunded. This initial refund pertained to a payment made before the new rules came into force, while a subsequent £19,000 payment, made after the rules were introduced, was deemed unreimbursable. Sarah expressed her shock, stating, “It really floored me. I had no understanding of the 13-month rule before it came in because it’s impossible to spot these things. So if it’s impossible to spot them how is the general public supposed to spot that?”
nn
The Mandatory Reimbursement Requirement Under Scrutiny
nn
The 13-month rule is a component of the Mandatory Reimbursement Requirement, implemented by the Payment Systems Regulator (PSR) in October 2024. This regulation was designed to standardize responses to “push payment scams”—where criminals trick victims into directly transferring money—across the finance industry. It replaced a previous voluntary scheme and was heralded by some as a “game changer” for enhancing fraud victim protection. The rule stipulates that victims of such scams should generally be reimbursed within five working days, up to a value of £85,000, provided banks and payment service providers are notified within 13 months of the last payment.
nn
However, Louise Baxter, head of the Scams Team at National Trading Standards, has called for an “urgent review” of the 13-month rule, advocating for its reform or removal. Baxter argues that the current framework “doesn’t provide protection to all consumers from fraud and scams.” She contends that the time limit should commence from the point at which a person realizes their money has been stolen, rather than from the date of the last payment. “Investment fraud can go on for a really long time,” Baxter explained, highlighting that victims may not discover the deception for a “considerable amount of time after you made the payment.”
nn
Bank’s Reversal and Regulatory Stance
nn
Following inquiries from BBC Radio 4’s Money Box, Lloyds Bank reversed its initial decision regarding Sarah’s case. A spokesperson for 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 £19,000.” The bank expressed “a great deal of sympathy” for Sarah, advising victims to report scams immediately. Sarah, “over the moon,” remarked, “I’d gone from losing what I thought was a big part of my retirement money to having it reimbursed. It’s amazing.”
nn
UK Finance, representing the banking sector, maintains that only a “small number of cases” typically fall outside the 13-month deadline. The Payment Systems Regulator acknowledged the complexity of such cases, stating, “We recognise that it can take time for someone to realise they’ve been scammed, particularly in investment scams.” The PSR emphasized that while the reimbursement rules include a 13-month claim window, they expect “payment firms about how this should be applied” and to “support customers appropriately and to consider the individual circumstances of each claim.”
nn
For victims dissatisfied with their bank’s handling of a fraud claim, the Financial Ombudsman Service (FOS) offers an avenue for recourse. The FOS operates without a time limit for complaints and possesses the authority to order banks to reimburse victims up to £455,000, significantly higher than the £85,000 cap under the PSR’s reimbursement rules.
nn
Sarah’s case underscores the critical tension between rigid regulatory deadlines and the often-protracted nature of sophisticated financial fraud. While the Mandatory Reimbursement Requirement aims to bolster consumer protection, the ongoing debate surrounding its 13-month reporting window highlights the need for a framework that is both clear and adaptable to the evolving tactics of fraudsters, ensuring equitable treatment for all victims.
