ATM swallows £500 but bank refuses to investigate

What do you do if your card is swallowed before you get your cash – yet you are still debited? We speak to a London man who has taken on NatWest

It’s the moment we all dread. Just before you are due to go on holiday you put your cashcard in the local ATM only for the machine to crash and gobble up your card.

But what happens if it later emerges that the money you asked for, but didn’t receive, was debited from your account?

This is what happened to London software designer, Hicham Mouline, this summer and he has faced a battle ever since to make his bank, NatWest, refund the money.

Mouline argues that given the bank retained his card, the machine could never have dispensed the cash. But despite this, NatWest has refused to refund the £500 it says he took out.

Mouline’s problems started in June when, needing to get some holiday cash, he went to the Nationwide ATM at the busy Canary Wharf station in east London. He put his debit card in the machine along with his pin number, at which point the machine crashed, retaining his card and not dispensing any money.

“I waited by the machine for 30 minutes to no avail. I called the number on the Nationwide machine and was told to contact my own bank. When I called NatWest I was told that the card had been cancelled,” he says.

Mouline went on the trip, but when he checked two weeks later he found that the £500 had been debited from his bank account.

He asked NatWest to investigate and it contacted Nationwide and filed a dispute claim. However, NatWest has told him that because the ATM balanced at the end of the day NatWest will do no more for him and that, as far as it is concerned, is the end of the matter.

Flabbergasted, Mouline asked Transport for London, which runs the station, to ask for CCTV footage but was told that the cameras don’t point over to the ATMs, and in any case, TfL only keeps videos for two weeks.

“I don’t understand how the bank can refuse to refund me. The cash is only dispensed after the card is returned, but my card didn’t re-emerge. I waited for ages, but the machine was still not working when I was forced to leave. I’ve since noticed this cash machine is quite often out of order,” he says.

He has also questioned whether someone had tampered with the ATM and pocketed his money.

NatWest has confirmed that Mouline’s card was retained but says Nationwide has told it no unusual activity was reported. A spokeswoman says: “NatWest contacted the ATM disputes team who approached the owners of the ATM in question. The disputes team were informed that at the close of business on 17 June 2013 the cash machine balanced, and the machine had shown no irregularities for that day.

“I can confirm NatWest has pursued all available options. However, as Nationwide has rejected our ATM dispute no further action can be taken by the bank.”

When Guardian Money asked how the cash could have been paid out given that the card was retained, NatWest failed to respond, and also failed to answer other questions about the case. It is still investigating.

We asked Nationwide to investigate but it told us that it did not recognise the dispute reference number given to it by NatWest, and therefore could not confirm if an investigation into the ATM dispute had taken place.

In disputes such as these, Money recommends that consumers open legal proceedings with a “pre-action letter” which gives the bank 14 days to return the money, and if it fails to do so, institute a claim in the small claims court. The Which? website has a template for the letter.

If it happens to you

Both the Payments Council and the Financial Ombudsman Service have confirmed that consumers who suffer a problem with an ATM withdrawal must contact their bank to complain, rather than the one that operates the machine where the person had the problem.

Your bank should then take up the matter on your behalf, and in many cases it will choose to refund the customer where there is some doubt.

ATM problems happen for a variety of reasons, both technical and mechanical. In recent years, thieves have targeted ATMs with a number of devices of varying sophistication – from false machine fronts, to crude metal devices that simply stop the cash from being dispensed.

However, a surprising number of people simply walk off without taking the cash they have asked for. If either the card or the money is not taken by the customer (or someone else), it will be automatically taken back into the machine and dumped in a separate basket.

When disputes happen, the cash machine operators add up the total amount dispensed and compare that with the amount left. If it contains the correct amount of cash, as appears to have happened in this case, it is harder for the consumer to argue that they did not receive their money. The banks often use the “balancing” defence – as NatWest has done.

A spokesman for the Payments Council, which represents all the banks and payments providers and oversees such matters, says the payments services regulations are there to help consumers in such circumstances.

It says that where a transaction has been found to be unauthorised, the payments provider (the bank) has an “obligation to immediately refund the amount of the transaction and, where applicable, restore the payment account to the state it would have been in had the transaction not happened”.

The rules are clear that banks must refund unless they have prima facie evidence that the customer has had their money, or that they have been grossly negligent. The same is true of all unauthorised card payments.

In guidance to the banks, the Financial Conduct Authority states: “We would generally expect the payment service provider to make the refund and other correcting actions immediately. Where an investigation is justified, it will need to be carried out as quickly as possible .”

A spokesman for the Financial Ombudsman Service says it receives plenty of cases each year similar to Mouline’s. It says each is judged on its own merits. Staff would look at when and how the customer had reported the problem. Meanwhile, the banks would be asked to justify why they had not refunded the customer.

Other customers in Mouline’s shoes have faced long delays only for their bank to reimburse them when presented with a legal threat, called a ‘Letter Before Action’, which them a further 14 days to respond before the commencement of proceedings in court.

Interestingly in Spain many ATMs have cameras built in that record the image of the person taken out the cash. If machines in the UK were similarly equipped, it is likely there would be fewer complaints such as these.  © 2013 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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