Investment Fraud and the 13-Month Reporting Rule
Sarah, a pseudonym used to protect her identity, experienced the theft of £20,000 in a highly sophisticated investment fraud. It took 17 months before she realized the investment was a scam.
Initially, Lloyds Bank informed her that there was a 13-month deadline for reporting scams, and as a result, they would only refund £1,000 of her losses. However, after BBC Radio 4's Money Box investigated the case, Lloyds refunded her the full amount within a day.
National Trading Standards has urged an urgent review of the 13-month rule to enhance protection for victims of push payment scams—frauds where criminals deceive victims into transferring money themselves.
UK Finance, representing banks, states that only a small number of cases fall outside the deadline and that victims can escalate complaints to the Financial Ombudsman Service.
The 13-month rule is part of the Mandatory Reimbursement Requirement introduced by the Payment Systems Regulator in October 2024. This regulation mandates that victims of push payment scams must be reimbursed within five working days, up to £85,000, provided the bank or payment service provider is notified within 13 months from the date of the last payment.
This rule replaced a previous voluntary scheme and was designed to standardize fraud response across the financial industry. It has been described by some as a "game changer" for improving protection for fraud victims.
However, Louise Baxter, head of the Scams Team at National Trading Standards, argues that the 13-month rule requires review, reform, or removal.
"It doesn't provide protection to all consumers from fraud and scams,"she says.
Baxter suggests the time limit should begin when 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,"she explains.
"You could get to a point where you didn't know you were a victim for quite a considerable amount of time after you made the payment so it would provide those extra protections for those consumers as well."
Sarah's Experience: "It's Really Floored Me"
Sarah, who requested anonymity, believed she was making an ethical investment in social housing. Before withdrawing £20,000 from her pension in October 2024, she conducted thorough checks on the firm.
"I felt that I had done all the due diligence, I had checked with Companies House, I had checked with the Law Society, I checked all the TrustPilot reviews,"she said.
She did not realize the fraud until March 2026, which meant she reported it to her bank after the 13-month deadline had passed.
Lloyds informed her that a £1,000 payment made before the new rules took effect would be refunded, but the £19,000 payment made after the rules were introduced would not be reimbursed.
"It really floored me,"Sarah said.
"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?"
Following the BBC's inquiry, 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."
A Lloyds spokesperson expressed sympathy for Sarah as a victim of investment fraud:
"Investing can be a great way to make money, but only when investing with legitimate, trusted companies. If you think you have been the victim of any scam, it's important to report to your bank immediately,"they added.
Sarah told the BBC:
"I'm over the moon. I just can't believe that in just over 24 hours it's changed. I'd gone from losing what I thought was a big part of my retirement money to having it reimbursed. It's amazing."
Regulator and Ombudsman Perspectives
The Payment Systems Regulator told BBC Radio 4's Money Box:
"We recognise that it can take time for someone to realise they've been scammed, particularly in investment scams.
"The reimbursement rules include a 13‑month claim window, and we have been clear with payment firms about how this should be applied.
"We also expect firms to support customers appropriately and to consider the individual circumstances of each claim."
Victims dissatisfied with their bank or payment service provider's handling of their case can escalate to the Financial Ombudsman Service (FOS). The FOS can order reimbursements up to £455,000 and does not impose a time limit on claims.
