I had £20,000 stolen and had to fight a 13-month fraud reporting rule to get it back

A Scam That Took Years to Uncover

I had 20 000 stolen and had – Sarah, who chose to keep her name private, found herself the victim of a highly intricate investment fraud. The deception was so well-crafted that it took her 17 months to recognize the scheme. Initially, she believed she had made a prudent decision by investing in a company claiming to support social housing projects. After withdrawing £20,000 from her pension in October 2024, it wasn’t until March 2026 that she realized her money had been siphoned off. The timeline of events highlighted a critical flaw in the system: the 13-month rule imposed by Lloyds Bank, which limited her ability to claim the full amount of her losses.

The 13-Month Rule and Its Impact

When Sarah first reported the incident, Lloyds Bank informed her that a 13-month time limit applied to fraud claims. This meant she could only recover a portion of her stolen funds, with the initial £1,000 being refunded immediately. However, the second payment of £19,000, made after the new rule took effect, was not covered. The bank’s rigid adherence to the policy left Sarah in a difficult position, as she was unaware of the rule’s implications at the time.

“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.” – Sarah

Call for Reform from National Trading Standards

Following Sarah’s case, National Trading Standards has urged a comprehensive reassessment of the 13-month rule. Louise Baxter, the team’s head, argues that the current framework fails to adequately safeguard consumers from financial fraud. She points out that the rule is based on the date of the last payment, not the moment a victim becomes aware of the scam. “Investment fraud can go on for a really long time,” Baxter 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.”

Under the existing policy, the 13-month window is designed to streamline the fraud reporting process. However, critics claim it creates a loophole, particularly in cases where victims are unaware of the scam’s nature. The rule was introduced as part of the Mandatory Reimbursement Requirement by the Payment Systems Regulator in October 2024. This policy aims to standardize how financial institutions handle fraud claims, ensuring victims receive compensation within five working days for up to £85,000 in losses.

Victim’s Due Diligence and the System’s Oversight

Sarah, who meticulously researched the company before investing, believed she had taken all necessary steps to ensure its legitimacy. She verified the firm’s status with Companies House, checked its credentials with the Law Society, and reviewed TrustPilot feedback. Despite her efforts, the fraud eluded her until months after the 13-month deadline had passed. “I felt that I had done all the due diligence,” she says. “I had checked all the TrustPilot reviews. But not a second payment of £19,000, made after the new rules came in.” Her experience underscores the challenge of identifying push payment scams, where criminals manipulate victims into transferring funds directly without the involvement of a third party.

Support from Lloyds and the Financial Ombudsman Service

Upon the BBC’s investigation, Lloyds Bank swiftly adjusted its stance, refunding the entire £20,000 within 24 hours. A spokesperson for the bank expressed sympathy for Sarah, acknowledging the emotional toll of such a scam. “Investing can be a great way to make money, but only when investing with legitimate, trusted companies,” they noted. “If you think you have been the victim of any scam, it’s important to report to your bank immediately.”

Despite Lloyds’ reversal, Sarah remains concerned about the rule’s broader implications. “I had no understanding of the 13-month rule before it came in because it’s impossible to spot these things,” she emphasized. “So if it’s impossible to spot them, how is the general public supposed to spot that?” Her frustration highlights the disconnect between the policy’s intent and its real-world application. UK Finance, representing the banking sector, argues that only a small number of cases fall outside the 13-month deadline, and that victims can still seek recourse through the Financial Ombudsman Service (FOS) if needed.

Reforms and the Role of the Financial Ombudsman Service

The Financial Ombudsman Service acts as a final safeguard for victims of fraud. It can order banks to reimburse losses up to £455,000, regardless of the time elapsed since the scam occurred. This means that even if the 13-month rule is strict, individuals like Sarah can still challenge the decision through the FOS. However, the regulator has defended the policy, stating that it allows payment firms to assess each case individually. “We have been clear with payment firms about how this should be applied,” said a representative. “We also expect firms to support customers appropriately and to consider the individual circumstances of each claim.”

While the rule was introduced to create consistency across the finance industry, some argue it prioritizes institutional efficiency over consumer protection. National Trading Standards’ Louise Baxter maintains that the rule should be revised to reflect the reality of how long it can take for victims to realize they’ve been scammed. “It doesn’t provide protection to all consumers from fraud and scams,” she stated. “The key is to align the time limit with the point of realization, not the last payment.”

A Shift in Policy and Future Implications

The Payment Systems Regulator has acknowledged the need for flexibility in how the 13-month rule is applied. They emphasized that while the deadline is set, firms are expected to take the customer’s situation into account. This means that in complex cases like Sarah’s, where the scam was not immediately apparent, banks may reconsider their initial decisions. However, the debate over the rule’s effectiveness continues. Critics stress that the current system leaves many victims without timely support, especially those dealing with sophisticated scams.

Sarah’s story has sparked a renewed conversation about the balance between regulatory consistency and consumer rights. While the 13-month rule was intended to streamline the process, its rigidity can inadvertently penalize those who fall victim to deceit. Her relief at the quick resolution of her case is tempered by the awareness that others may not be as fortunate. “I’m over the moon,” she said. “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.”

As the finance industry adapts to these evolving challenges, the need for a more responsive system becomes increasingly evident. With push payment scams on the rise, policies must evolve to ensure that victims are not left waiting months—or even years—before they can reclaim their losses. Sarah’s experience, though resolved, serves as a powerful reminder of the importance of reform in protecting the public from financial deception.