What does 'gross negligence' mean when banks refuse scam refunds?
Gross negligence in the context of bank fraud refusals means conduct significantly below what a reasonable person would do — it is a high legal bar that simply being deceived does not meet, and banks must prove it rather than merely assert it.
Last reviewed: 10 June 2026
Explanation
'Gross negligence' is the standard banks use to deny refunds on unauthorised or APP fraud claims. Under UK payment services rules, banks cannot deny a refund simply because the victim was careless — they must show the customer acted with a level of recklessness substantially below what a reasonable person would do in the circumstances.
Examples of what courts and the FOS have found to be gross negligence include: ignoring explicit fraud warnings from the bank during the payment process, sharing a PIN with another person, or making a payment after being clearly told it was fraudulent by the bank. Examples of what has been found not to constitute gross negligence include: being deceived by sophisticated impersonation, trusting someone over a long period of relationship-building, or clicking a phishing link.
Banks sometimes assert gross negligence without proper evidence or based on reasoning that would not withstand scrutiny. If your bank refuses your claim citing gross negligence, ask them to provide their specific reasoning in writing and challenge any reasoning that does not account for the sophistication of the fraud you experienced.
This is general information. What constitutes gross negligence in any specific case is a factual and legal question. The Financial Ombudsman Service has upheld many complaints where banks incorrectly applied the gross negligence standard.
Common red flags
- Your bank asserts gross negligence without specifying exactly what you did wrong
- The bank argues you should have spotted obvious red flags without acknowledging how convincing the fraud was
- You ignored a specific fraud warning shown by the bank during the payment flow
- The bank's refusal letter uses vague language rather than specific facts
What to do now
- Request the bank's specific reasoning for gross negligence in writing
- Challenge any characterisation that does not reflect the actual sophistication of the scam
- Escalate to the Financial Ombudsman Service with a full account of the fraud
- Include evidence of how convincing the scam was — screenshots, emails, call records
- Cite the FCA's Consumer Duty and vulnerability obligations if applicable
Frequently asked questions
Does sharing my bank account details count as gross negligence?
It depends on context. Sharing your sort code and account number is not generally considered gross negligence — this information is routinely given for receiving payments. Sharing your full card details, online banking password, or one-time passcode with someone who then uses them fraudulently is a different matter and may affect your position.
If I ignored a Confirmation of Payee warning, is that gross negligence?
Possibly — it depends on the specific warning and your reasons for proceeding. If the bank showed a clear mismatch warning and you continued without further verification, this is a factor the FOS will consider. However, being told by a convincing fraudster that the mismatch is normal or due to a business name difference is a relevant counter-argument.