Do Banks Refund Scammed Money? (How To Dispute Fraud)

Can You Get Money Back From Your Bank If You Get Scammed?

Amber had just left Chase Bank when she received a text message warning her of potential fraud on her account. But before she could even respond, her phone rang. 

The caller ID indicated that it was her bank, and the person on the other end knew a lot about Amber and her account — enough to gain her trust and convince her to wire $17,500 to a “secure account” in order to protect her savings [*]. 

But in reality the whole thing was a scam — and all of the money Amber transferred went directly to scammers.  

Unfortunately, Amber is just one of the millions of Americans who lose money to scams each year. According to the Federal Trade Commission (FTC) [*]: 

Americans lost nearly $8.8 billion to fraud in 2022 — with imposter scams accounting for a staggering $2.7 billion in losses.  

But if you get scammed, is the money gone forever? Or do banks refund scammed money? 

In this guide, we’ll explain what happens when you get scammed, how you can try to get your money back, and what to do if your bank won’t reimburse you.

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Do Banks Refund Scammed Money? 

Unfortunately, there is no straightforward answer to this question. Whether or not your bank will refund scammed money depends on various factors — such as the bank's policies, the type of scam, how you paid, and how quickly you reported the fraud. 

The good news is that there are some protections for consumers who have been scammed out of money:

• The Fair Credit Billing Act (FCBA): This 1974 federal law limits consumer liability for credit card fraud to $50 in most cases, and provides special rights for fraud victims — like the ability to dispute charges via phone instead of in writing [*]. 
• Credit Card Zero Liability Protection Policies: Many credit card companies offer zero liability protection policies that protect consumers from fraudulent charges made with their cards.
• Bank Account Zero Liability Policies: Some banks' policies include zero liability protection to ensure that customers don’t have to pay for fraudulent transactions made on their accounts — with limitations.
• Regulation E: This federal regulation protects consumers who use electronic fund transfers, such as ATM transactions, debit card payments, gift cards, and direct deposits [*]. In 2022, the Consumer Financial Protection Bureau (CFPB) updated Regulation E to protect all peer-to-peer (P2P) online payments [*]. 

The bottom line: Refund and reimbursement policies change from bank to bank. There’s no guarantee that your dispute will be accepted. Instead, it’s a good idea to get additional protection and coverage from an identity theft protection service.

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Your First Step: Secure Your Identity and Report the Fraud

Almost 69% of identity theft victims are repeat victims [*]. Once scammers have your personally identifiable information (PII), they can exploit you with different payment scams — or even sell your information to other fraudsters. 

That’s why the first thing you should do if you’ve been scammed is secure your identity and report the fraud. 

Here’s what to do:

• Document the fraud and stop all contact with the scammer. Download statements and take screenshots of emails, texts, and any other correspondences that occurred with the scammer. Then, break off contact to stop any further fraud.
• Lock your cards to prevent more damage. Contact your bank or credit card issuers and ask them to lock your cards and cancel your accounts. Double-check that they have your correct address for sending replacement cards to you.  
• Check your insurance coverage. Your home insurance provider or employer may provide coverage for fraud or identity theft. If not, you might want to consider getting dedicated identity theft insurance. 
• Freeze your credit with all three bureaus. Contact each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) to request a credit freeze. This prevents anyone from accessing your credit file or opening new accounts in your name.
• File an official report with the FTC. Gather details of the incident and your personal information to file a report at IdentityTheft.gov. The FTC will provide a recovery plan and help you dispute fraudulent charges.
• Update your passwords. A crucial step in the wake of a scam is to change all of your online account passwords. By creating complex, unique login credentials that you can remember or store with a secure password manager, you’ll reduce the chance of a hack.
• Enable two-factor authentication (2FA). For added protection, use 2FA on all of your accounts. If imposters can’t provide the second form of proof — like a one-time password (OTP) or biometric scan — they won’t be able to access your accounts.‍
• Scan your devices for malware and other viruses. A reputable antivirus software scans your devices to detect and isolate malicious programs that hackers use to steal your passwords and data — like trojans, keyloggers, and spyware.

How To Recover Scammed Money From Your Bank

If you lost money to a fraudster, you might think your funds are gone forever. But in some situations, banks do refund scammed money.

Here’s what you should do if you find yourself in the following scenarios:

1. If there’s an unrecognized charge on your bank account

Scammers can infiltrate your account in many ways — and often, it's not your fault. 

After a data breach, cybercriminals buy and sell stolen bank account information on the Dark Web. Other fraudsters use social engineering tactics like phishing emails, smishing texts, or fake Amazon scams to trick you into sharing your account number and password.

Thankfully, most banks will cover fraud resulting from unauthorized access to your bank account. 

What to do:

• Contact your bank’s fraud department immediately. Tell them what happened, ask them to cancel your cards and accounts, and request that they reverse the charges. 
• Share your FTC report. You can use the report and any other documentation to prove you’re a victim of fraud. 
• File a complaint with the Consumer Financial Protection Bureau (CFPB). If the bank won’t refund your money, the CFPB will investigate. The CFPB will follow up, and most companies respond within 15 days. You can lodge a complaint on the Consumer Finance website, providing details of the scam and your communications with the bank. 

📚 Related: How To Protect Your Bank Account From Identity Theft →

2. If you’ve sent scammers money through a payment app

Many scammers use pressure tactics or emotional manipulation to coerce victims into sending money through a payment app like Zelle or Cash App. As P2P payments happen almost instantly, it’s hard to stop the transfer.

There were over 192,878 Zelle scams between 2021 and the first half of 2022 — but only 9.6% of victims recovered their scammed money from banks [*]. 

And, it was only in November 2023 that the 2,100 financial firms on Zelle began reversing transfers as of June 30 for customers duped into sending money to scammers [*].

What to do:

• Contact the payment app's customer support. Tell the support agent about the fraudulent transaction and share useful data, such as the recipient's information, transaction ID, and details of any communication with the scammer.
• Request a chargeback under Regulation E. This regulation is designed to protect banking customers who transfer money via electronic methods [*]. You can initiate a dispute to get your money back if it was an unauthorized transaction. You’ll need to provide proof of the scam — including screenshots, chat logs, or emails.
• Notify your bank. As the app is linked to your bank account, it’s crucial to report the fraud to your bank. They can block your card and place a fraud alert to stop further theft. 

3. If scammers used your credit card 

Have you spotted unfamiliar charges on your credit card statement? Discovering that criminals have fraudulently used your credit card is stressful. But thankfully, the FCBA protects you against fraudulent charges. 

What to do:

• Contact your credit card issuer immediately. Use the customer service number on the back of your credit card. Explain that you’re a scam victim, and provide details about the unauthorized charges.
• Submit a dispute. Your card provider can guide you through the credit card dispute process and will request information to support your claim — such as details of the transactions, receipts, and proof that you were in another location when the bogus charges were made.
• Monitor your statements. Keep a close eye on your credit card statements because scammers may strike again. If you notice any new fraud charges, report them to your card issuer.

📚 Related: Bank Account Hacked? Here's How To Get Your Money Back →

4. If scammers used your debit card

Scammers can get debit card details through bank phishing scams, data breaches, or skimming devices. With the stolen data, fraudsters can create counterfeit cards — known as "white cards" — to make unauthorized purchases or withdrawals.

If you receive bank alerts about suspicious activity on your debit card or have trouble using the card, these could be red flags that you've fallen prey to white card fraud. 

What to do:

• Immediately contact your bank. Ask to speak to the fraud department, and explain that there has been unauthorized activity on your debit card. Zero-liability policies ensure that you won't be held responsible for unauthorized charges — as long as you report the fraud within two days of discovering it.
• Request a card replacement. As the current card is compromised, you must cancel it and get a new one to prevent further fraudulent transactions.‍
• Place a credit freeze. This security measure stops anyone from accessing your credit file or opening new accounts in your name. Remember to keep the PIN safe so that you can thaw your credit reports later. You must contact each bureau individually to request a credit freeze:

5. If you sent fraudsters a wire transfer from your bank account

Scammers often trick victims into believing they're making legitimate wire transfers. Jenna Carlson thought she was sending money to her real estate agent when she responded to an email.

But an impersonator had infiltrated the conversation and tricked Jenna into wiring $42,000 to a different account [*]. 

Unfortunately, many lenders can’t offer full protection against wire transfer scams. While banks will offer some support, be aware that if you send money to a scammer this way, it may prove impossible to retrieve.

What to do:

• Notify your bank or the transfer company’s fraud department. As soon as you realize you've been scammed, call your bank and the wire transfer company and share details about the fraud.
• Request a recall or reversal. Time is critical in these situations, so make the reversal request as soon as possible. 
• Beware of third-party fraud recovery services. Some experts specialize in recovering funds lost to wire transfer scams. But take care to vet customer reviews online — fraudsters posing as “fraud recovery services” prey on victims, tricking them into falling for another costly scam. 

6. If scammers have access to your bank account

Scammers can access your bank account in many ways, from sophisticated hacking campaigns to low-tech shoulder surfing at your local cafe. If you notice strange activity on your bank account — such as changes to the account details, beneficiaries, or unfamiliar charges — it’s critical to find out what’s happening.

What to do:

• Beware of liability limits. Your bank will protect you, but you must report fraud quickly to ensure that you aren't liable for the charges. Check the terms and conditions on your bank's website.
• Change your online banking passwords. Any suspicious activity related to your bank account is cause for alarm. Immediately update your passwords so that they are extremely difficult to guess. ‍
• Implement additional multi-factor authentication (MFA). In some cases, 2FA is enough, but you shouldn’t take chances with your finances. By using biometrics, authenticator apps, and hardware security keys, you’ll make it almost impossible for criminals to access your account.

How Long Does It Take for Banks To Refund Scammed Money?

The timeline for getting a refund from your bank after a scam can vary, depending on the bank's policies. Also, how you paid the fraudster will have a huge impact on how — and when — you get your money back.

If you paid a scammer with a debit card:

• Federal law requires banks to investigate disputed charges within 10 days of receiving a complaint.
• For a new account that has been opened in the past 30 days, the bank has 20 business days to investigate.
• The bank must provide a provisional credit to your account within 10 days, and it has up to 45 days to complete the investigation.
• If the bank determines that the charge was fraudulent, it must refund your money and remove the charge from your account [*]. 

If you paid a scammer with a credit card:

• Your card issuer must acknowledge your dispute within 30 days. 
• After receiving your dispute letter, the company has another 60 days (or two billing cycles) to investigate. 
• The company must notify you in writing of its decision with a full explanation. If you disagree with the results, you have 10 days to respond.

What To Do If the Banks Won’t Give You a Refund

If your bank rejects your claim or won’t give you a refund, don't lose hope. Here are four steps you can take to encourage the bank to refund scammed money:

First, send a written dispute letter to your bank

Make sure you include any evidence that supports your claim — such as an FTC report, receipts, or emails from the scammers. Keep a copy of the letter for your records.

Next, follow up with your bank in 15-30 days 

By being persistent, you can continue to provide useful information to the bank (if there are any developments) and stay top of mind with their fraud resolution team.

Submit a complaint to the CFPB

If the CFPB finds that your bank did not follow proper procedures or violated any laws, they may take legal action against the bank. You can submit a complaint via the following ways:

• Completing the online complaint form
• Calling 855-411-CFPB (2372)

Contact law enforcement 

If the banks aren’t doing enough for you, you can file a police report. This step could also help if you believe that the thief is in the local area. Make sure to bring your FTC report and all supporting evidence for the police to make an official report. 

📚 Related: The 7 Latest Chase Bank Scams (and How To Avoid Them) →

How To Protect Your Bank Account From Scammers

In 2023, con artists employ a wealth of tactics to steal your money — including phishing emails, fake websites, and impersonation phone calls. You must adopt a proactive mindset to keep your personal information and financial accounts safe.

Here are nine steps to secure your bank account from cybercriminals:

1. Don’t share your account numbers, passwords, PINs, or OTP codes with anyone. You should always protect sensitive credit card information and bank account details. Even friends and family don’t need to know. 
2. Ensure that you use a strong and unique password for your online accounts. Select a combination of uppercase and lowercase letters, numbers, and symbols. Also, avoid using common words, keyboard patterns, or basic personal information that someone could easily guess.
3. Enable two-factor authentication (2FA) on high-value targets such as banking, email, and IRS accounts. When Google made 2FA mandatory in 2021, there was a 50% drop in compromised accounts [*]. The safest forms of 2FA are hardware security keys or authenticator apps.
4. Never click on links in unsolicited emails or texts. If you click on a suspicious link in a scam email or spam text, it may initiate a malware download on your device, or direct you to a bogus website on which cybercriminals can steal any information you enter — like your credit card numbers.
5. Review your bank account and credit card statements regularly. Take note of anything you don't recognize, and immediately report suspicious activity to your bank.
6. Use a secure internet connection when accessing your online bank account. It’s easy for hackers to compromise unsecured public Wi-Fi in hotels, restaurants, and airports. With a virtual private network (VPN), you can encrypt your digital traffic and activity in order to combat attempted hacks.
7. Be wary of investment scams or offers that sound too good to be true, such as emails that claim you won a lottery, gifts, or a chance to become an early investor in a promising new cryptocurrency exchange. 
8. Never rush transactions if someone is pressuring you. Watch out for suspicious emails, texts, or calls in which someone urges you to make a quick money transfer.
9. Use a credit monitoring service. Aura provides 24/7 credit monitoring services with the fastest fraud alerts in the industry. If there are any changes to your credit file, you’ll get instant notifications — affording you the best chance of stopping scammers quickly.

Don’t Let Fraudsters Take Off With Your Funds

Banks have a legal and ethical responsibility to refund scammed money to their customers. However, you can’t always get scammed money back. Whether it’s a lack of evidence or human error on your part, thieves can sometimes get away with your stolen funds. 

The best way to safeguard your finances is by signing up for a comprehensive digital security provider that protects against various forms of fraud — including identity theft, credit card fraud, and phishing scams.

Aura is an award-winning, all-in-one identity theft protection solution that offers:

• 24/7 three-bureau credit monitoring with rapid fraud alerts that are up to 250x faster than other digital security providers³.
• Digital security tools including a VPN and Antivirus software with military-grade encryption to protect your devices against malware, spyware, and ransomware threats while you bank, browse, and shop online.  
• Dark Web monitoring that scans the internet in near real-time and alerts you if it detects any of your personal information on illicit marketplaces or forums.
• $1,000,000 insurance policy for every adult on your Aura plan to cover eligible losses due to identity theft — such as stolen money, credit card theft, and bank transfer fraud.
• White Glove Fraud Resolution Specialists that provide U.S.-based 24/7 support to help you navigate challenges with banks, creditors, and government agencies.

Keep your bank account safe from scammers. Try Aura free for 14 days.