FCA thematic review on fair treatment for consumers who suffer unauthorised transactions

Published on 3rd Aug 2015

Thematic reviews form an important part of the FCA’s supervisory approach and are used to assess (present and future) risks across the regulated sector. On 28 July 2015, the FCA published a report setting out the findings of its thematic review into fair treatment for consumers who suffer unauthorised transactions. The review centred on current accounts and credit cards, as these are core services used by consumers to undertake regular, day-to-day transactions. 

Unauthorised transactions 

An unauthorised transaction is a payment made from a customer’s account without their consent. This can include card transactions, account transfers, ATM withdrawals and Continuous Payment Authorities and can occur as a result of fraud, duplicate payments, failure to act on a customer’s instructions and theft of a card. The review focused on whether firms were complying with legal requirements, and in particular whether retail customers received appropriate refunds, set out in the Payment Services Regulations 2009, the Consumer Credit Act 1974 and, in some cases, the FCA Handbook. 

The findings

The review involved an assessment of ten regulated firms providing current accounts and/or credit cards to understand if the consumer protections in place are effective and whether firms are delivering fair outcomes for their customers. Chapter 3 of the report summarises these firm assessments. The FCA found that, on the whole, the firms were demonstrating good practices (with regard to customer communications and awareness, for example), although there were also potential areas of improvement. Examples of the latter included instances where firms relied on a small number of experienced in staff in decision making and inconsistencies in the way claims were assessed and inconsistencies in the content of terms and conditions. The report found that a number of firms wanted to include helpful material in their terms and conditions to educate customers on how to keep their accounts secure and raise their awareness of unauthorised transactions. However, the FCA questioned whether terms and conditions are the right channel for customer education and found that, in general, firms were unable to evidence the effectiveness of this approach.

In addition to the firm assessments, the FCA commissioned research (by Strictly Financial) to help understand the impact of unauthorised transactions on consumers and their experiences of the claims process. The results are summarised in Chapter 4 of the report. Findings included the fact that although most customers were aware of protections there remained frustration about a lack of communication from the provider on the status of their claim for refunds.


Based on the report the FCA have concluded that no further thematic work is immediately required. The report is potentially of interest to regulated firms offering payment services, not just current account and credit card providers, as it provides specific examples of good practice and areas where performance was more mixed. This can assist firms in assessing their own measures and help to ensure consistently high standards in line with FCA expectations.

Interested in hearing more from Osborne Clarke?

* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

Interested in hearing more from Osborne Clarke?