Let’s debunk a few urban myths about banking - Martyn James

I often get asked some quirky questions about banking problems. Some of these are modern ‘urban myths’ – things that people believe but aren’t really based on fact. Other questions are about things that we just don’t understand but have pretty simple explanations.

Do you know what to do if an ATM swallows your bank card? Martyn James does...

In this column, I thought I’d answer some of the questions that I regularly get asked. Keep them coming!

Is cash going to be abolished along with bank branch services?

Let’s start with some positive news. The Financial Services and Markets Bill will require banks and building societies to ensure withdrawal and deposit services are available, along with Banking Hubs for people dealing with the impact of branch closures. Cash Access UK are currently sourcing and launching over 50 new Banking Hubs now.

What happens if a cash machine sucks up my card?

ATMs can retain your card for a number of reasons, but mainly it’s because your PIN hasn’t been recognised after the third attempt or a technical problem occurs. Regardless of whether you’re a customer of that bank or not, the way to get things sorted out is the same.

When your card is retained, the ATM (should) drop it into a self-contained box in the bowels of the machine. The same goes for cash that you don’t take in time. The only way the card can be released is when two members of staff open the machine together (two for security reasons – it’s standard practice). The staff will then locate the card and identify you, though this can be more complicated if you aren’t a bank customer. With remote ATMs (the ones in petrol stations or shops, or ones that charge) there’s usually a number on the machine.

However, there are a range of scams where fraudsters fit fake covers on machines to retain your card or film you entering your pin. So if anything looks suspicious, get on the phone to your bank and cancel the card before leaving the machine.

What happens if I get a credit in to my account that’s not mine?

The biggest banking urban myth going suggests that a credit to your account in error means you can spend the money. Or alternatively, if you’ve spent it / withdrawn it / hidden it under the bed, they can’t take it back off you.

This is not even remotely true. In fact, I’ve seen cases where even six months after the error, the bank has taken back the cash – and held the recipient liable. Yes, it’s not your error – but that doesn’t mean free money.

If you’ve spent the cash, then you have to repay it. But the terms can vary, depending on whether you could have had a ‘reasonable expectation’ that the money was due to you.

If that’s the case, then your bank should offer you an interest free loan at a rate of repayment you can afford, even if it’s only a few pounds a week. If you should have known then they can take the lot back from you. But they should not take you overdrawn or damage your credit in the process.

What happens if you didn’t authorise a payment on your account?

If you don’t recognise a payment, ask your bank for more information about where it’s come from. A regular debit is easier to track down – if you cancel it, you’ll soon get an answer from the firm debiting you. Payments you haven’t authorised can be ‘charged back’ if you act relatively quickly. You’ll need to fill out a form and your bank will ask the other bank for proof that their customer can debit you. No proof equals refund. Banks even have lists of dodgy businesses that mean you might just get an automatic refund if it’s on ‘the black list’.

Is there a court case which means my mortgage / loan isn’t payable?

No – there isn’t. Yet this myth still does the rounds on the internet and people swear blind to me it’s true. Don’t fall for it.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist.