Do banks refund scammed money? How to get your money back from a scammer

I’ve written extensively about scam prevention and online safety, but one important question often comes up after the damage is already done: can you recover money if you’ve been scammed? To find out, I worked with the Cybernews research team to examine whether banks refund scammed money and under what circumstances victims may be able to get their funds back.

Financial losses from fraud continue to rise. According to Federal Trade Commission data, reported losses grew from $10 billion in 2023 to $12.5 billion in 2024, with about $1.8 billion sent through bank transfers. While recovering stolen money is sometimes possible, it often depends on how quickly you act and the type of payment involved.

In this guide, I explain when banks may reimburse scam victims, what factors affect your chances of getting your money back, and the steps you should take immediately after discovering fraud. I also cover practical tips to help you avoid scams in the first place, based on banking policies, industry guidance, and fraud prevention best practices.

Do banks refund scammed money?

Yes, a bank will refund scammed money, but only if certain circumstances are met. Banks are very unlikely to issue refunds if you have authorized the payments. For example, if a scammer calls you by phone and tricks you into making a bank transfer, then your money might be gone for good.

However, banks typically refund unauthorised transactions. If hackers manage to break into your bank account and empty it, you are likely eligible for a refund.

In the US, Regulation E protects citizens' assets from unauthorized transfers. It protects funds whenever a scammer illegally acquires account credentials (or accesses them in another illegal way) and makes a transfer.

If you notice an unauthorized transfer, you can ask the bank for an Error Resolution under Regulation E. Firstly, you must contact the depository institution (the credit union or bank that holds your account), providing the required reason code and documentation. If the bank approves your claim, it contacts the acquiring bank to pull your funds and transfer them back.

What to do if you’ve been scammed

You must act quickly if you want your bank to reimburse you for the scam. Here's where to start.

1. Immediately contact your bank and report fraud. If you are fast enough to report the scam within hours or even minutes, the bank may be able to stop the fraudulent transfer. Collect as much data as possible for the bank to initiate a dispute quickly.
2. Freeze the account or card. If scammers can already use your card number or make account withdrawals, you may want to block the card or freeze the account. You can consult with the bank about whether it should be a temporary or permanent freeze, and whether you should change the account number.
3. File a police or FTC report. An FTC report is often required for a successful fraudulent transfer dispute, which you can file on reportfraud.ftc.gov. If you are a victim of identity theft or have lost a large sum of money, contacting your local police department is also beneficial to start an investigation.
4. Use your legal rights. For debit card, P2P app, ATM, and ACH transfers, use the Error Resolution under Regulation E. For credit cards, refer to the Dispute under Regulation Z. However, if you were tricked into authorizing the payment yourself, you may be held liable for the action.
5. Collect evidence. Provide to the responsible institutions as much evidence as possible. Take screenshots of emails or chat logs, collect transaction details, like date, amount, and available scammer information. Write down the telephone number for phone scams.

How will a bank refund your scammed money?

Regulation E for EFT disputes offers victims financial provisional credit protection. The customer regains access to the disputed assets, which are made permanent if the investigation confirms fraud. Here's the general timeline of the dispute process.

• Investigation opens. The victim informs the bank of unauthorized transfer, often by phone or email. Timing is crucial, as customer liability can be unlimited if the contact is made 60 days after the transfer. The bank investigates the dispute and may require additional verification, but must open the investigation without causing delays.
• Provisional credit. Not only can banks refund scammed money, but there's also a financial safety net. In most cases, banks must provide provisional credit for the disputed amount if the investigation takes longer than 10 business days. It must make the credit available within 10 days also.
• Investigation continues. The bank works with payment processors and the Acquiring Bank to collect required information. It checks account history, verifies victims' evidence, and inspects transaction logs. Verifying whether the transaction was authorized or unauthorized also happens at this stage.
• Resolution. If the dispute is verified, then the issued provisional credit becomes permanent, and the victim gets the money back. The banks must make funds available within one day after finishing the investigation and notify the customer within three days.

There's also a general timeline if you're wondering how long banks refund scammed money. Typically, the dispute must not exceed 10 business days.

It can be prolonged to 45 calendar days if the bank requires, but it must make the provisional credit available. The maximum investigation duration can take up to 90 calendar days if the investigation involves parties outside of the US.

What protections exist for consumers who have been scammed?

The relevant regulation for unauthorized transfer protection primarily depends on the type of payment method that was used during the transaction.

The Electronic Fund Transfer Act, or Regulation E in short, covers the following: debit card transfers, peer-to-peer payment apps (Venmo, PayPal, Cash App, etc), ATM withdrawals, and ACH (Automated Clearing House) transactions.

For credit card scams, the victim refers to the Truth in Lending Act, or Regulation Z. It has a maximum liability limit of $50, which does not increase. But that doesn't mean you can postpone reporting fraud, as successful resolution significantly depends on quick action.

For Regulation E investigations, the consumer's liability is limited to $50 if the report is made within 2 business days. It increases up to $500 if the report is made after 2 business days, and can become unlimited after 60 days.

In reality, you will likely have no liability for unauthorized fraudulent transfers to Zero Liability Policies. This is a voluntary practice offered by banks as a consumer benefit, but it is generally restricted only to unauthorized payments.

There are more financial guarantees that encompass other scenarios, outside of unauthorized fraudulent transfers. In case of a merchant dispute, for example, upon duplicate billing or not receiving paid goods, you can contact the bank for a chargeback.

Additionally, take a look at FDIC/NCUA protections. It protects consumer finances in case of a bank's bankruptcy. The insurance covers up to $250,000 per insured institution, depositor, and ownership category.

How to avoid online scams targeting your bank account

Knowing available protection regulations is excellent, but you should also know how to avoid scams in the first place. Firstly, I recommend checking out identity theft protection services, but here are a few practical safety steps you can take without dedicated software.

• Don't share credentials and codes. Your bank will never ask you to provide your account login and password. They also will not ask for two-factor authentication codes. If you receive a phone call or email asking for these details, it is almost certainly a scam.
• Use the official phone number. Even if your smartphone shows the bank's name as the caller ID and the legitimate phone number, it doesn't mean that it's not a scam. These details can be spoofed. Instead, end the conversation and call the official bank number yourself to be sure you are talking to its real representatives.
• Ensure account protection. Use long and unique passwords and never reuse the same password for different services. Also, enable two-factor or multi-factor authentication whenever possible. This way, your account will be safe even if hackers manage to steal your credentials.
• Avoid hasty action. If you receive a phone call or email urging you to make a transfer immediately, that's an indication of a scam. Also, beware of placed links within emails and text messages, as they can lead to fraudulent websites that steal data or even infect devices with malware.

Protect My Accounts with Aura

Conclusion: protect yourself from getting scammed

The key takeaway is knowing how you can reverse a bank transfer if you've been scammed, and also doing it quickly. If scammers manage to transfer money and withdraw it from the acquiring bank account, the chances of reimbursement shrink significantly.

To notice scams quickly, I recommend checking out the best identity theft protection services. Professional software like Aura offers three credit bureau monitoring and monitors bank accounts. It issues immediate alerts upon noticing anything dubious so that you can take action and prevent financial loss.

If you suspect that your personal information was leaked online, I suggest considering the Coveron service (formerly NordProtect). It has one of the best dark web monitors to spot personal information exposure. Also, it offers an elaborate identity theft insurance policy to ensure your financial stability if you have been scammed.

The only thing to remember is that this tool is available only for US residents, but if you're in NY, you won't have access to its identity protection benefits, like identity theft recovery, cyber extortion protection, and online fraud coverage.

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