What is ‘gross negligence’ in bank fraud claims?

Under the PSR mandatory reimbursement framework, gross negligence is not simply being careless or being tricked by a sophisticated scam. It is a very high legal bar that requires significantly more than ordinary negligence.

The PSR has identified only four specific scenarios that constitute gross negligence. If your bank is citing anything else, their rejection may not be valid.

Under PSR guidance, a consumer is only grossly negligent if they:

1. Ignored a specific warning from their bank that the transfer could be a scam 2. Failed to report the scam to their bank within 13 months of the last payment 3. Failed to respond to reasonable and proportionate requests for information during the bank’s investigation 4. Failed to consent to the bank reporting the scam to the police, or failed to report to police when requested by the bank

Only these four scenarios justify a gross negligence refusal. The burden of proof lies with the bank — they must prove you were negligent, not the other way around.

Being tricked by a sophisticated scam is not gross negligence. Falling for a convincing impersonation of your bank is not gross negligence. Making multiple payments to a fraudster over time is not gross negligence. Trusting someone you believed was a genuine romantic partner is not gross negligence.

If your bank is refusing your refund because you ‘should have known’ it was a scam, this is not a valid ground under the PSR framework. These are professional criminals whose entire operation is designed to deceive.

If your bank has cited gross negligence, ask them to specify exactly which of the four PSR scenarios applies and what evidence they have. If they cannot point to one of the four specific grounds, their rejection may not be compliant with PSR rules.

You can escalate to the Financial Ombudsman, who will independently assess whether the bank’s gross negligence finding was fair and in line with PSR guidance.