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Cancelling a credit card in the United Kingdom (UK)

Last Edit: 24/07/18

Yes: banks typically monitor spending habits to detect any unusual patterns: out of the ordinary large purchase; the type of purchase (diamonds are a popular purchase for frausters and may create a red flag); merchants charging you twice; and a small purchase followed immediately by a large one (fraudster checking the details stolen work). Some of the techniques that banks use to detect fraud are obviously kept secret: so as to not warn fraudsters of what to avoid. Lloyds bank, in March 2013, guaranteed "to refund your money in the unlikely event you experience a fraud with your Internet Banking" (image shown below). A prime example of fraud detection/protection -- that many online bank customers will have come across -- is when they have attempted to make an unusually large transfer of money -- house deposit, car purchase etc -- and very often this transfer will be investigated by the bank and usually result in a phone call to the customer to verify they have made the transfer.

Found upon the lloyds banking site in 2013, it is promise to protect customers against online banking fraud.
Pictured: Lloyds bank 2013 fraud protection promise, published on their UK website.

Of course, fraud and security are not always the same thing; if a customer has been extremely lax in their security -- very negligent -- then the bank may investigate and not issue a refund. An example of being very negligent would be giving someone else a PIN number or login details. Up until 2017, bank customers could not issue a complaint/refund to their bank if they were the recipient of a Authorised push payment (APP) fraud: where customers are tricked into sending money to the account of the fraudsters. However, the Financial Conduct Authority (FCA) is considering a change to the complaint handling rules in relation to Authorised push payment (APP) fraud.

Fraud tends to come in the form of: identity theft, stolen details, phishing or authorised push payment (APP). The automatic fraud detection techniques that banks use can help to stop identity theft and stolen details -- when the fraudsters attempt to access and use those details -- but it can be much harder for banks to intervene in authorised push payment (APP) frauds; because the transaction is being authorised by the owner of the account -- probably using the device/location they always have to access their account, therefore not hitting a red flag in the banks fraud detection. In comparison, if a fraudster has stolen bank details via online malware -- keylogger etc -- then attempts to access the account from a new device and location (maybe even a different country) then it is much more likely to be identified by the banks fraud protection.