← All insights Finance and crypto

Money taken by deception: what recovery actually turns on

Money has left your account because somebody lied to you, and every instinct points at the person who told the lie. Recovery is decided somewhere else entirely: by what happened to the funds after they arrived.

Two quite separate exercises get run together in the opening conversation. One is whether your bank or payment provider has to put the money back. The other is whether a person or a company can be made to return it. They are answered by different people, against different tests, on different evidence, and the outcome of one tells you very little about the outcome of the other.

The second thing that gets collapsed is fault and recovery. How comprehensively you were deceived, how convincing the documents were, how much you have lost: all of that matters to whether someone is liable to you, and none of it governs whether there is anything left to take back. A claim against somebody who has already dispersed the money can be perfectly good and recover nothing.

That distinction is uncomfortable, and it is the most useful thing to understand at the start, because it is what tells you whether to spend anything at all.

What the first response has to protect

Reporting the payment to the institution that sent it, so that it can be flagged where it landed, comes first for an obvious reason. What comes second is less obvious: keeping intact everything that shows how the payment came to be made. That material is usually lost quickly, and lost with the best of intentions.

In a business the destruction is often performed by your own side. Where an email account has been interfered with, the response is to secure it, and securing it commonly means wiping the mailbox, clearing whatever the intruder left behind and rebuilding a clean environment. The finance team, meanwhile, is trying to be helpful by summarising the sequence of events from memory. Between them, the record that showed exactly what arrived, from what address, and what was changed on which document, can disappear while everyone believes they are being responsible.

Reporting the matter to the police, in England and Wales through the national fraud reporting service, is worth doing and is not a recovery step. A criminal investigation is directed at punishing an offender rather than at restoring your money, it proceeds on its own priorities, and a crime reference number by itself moves nothing. The civil route and the criminal route can run alongside each other.

The bank conversation and the legal one are different exercises

What your bank is deciding is whether the payment falls within the arrangements that require reimbursement in the United Kingdom. Those arrangements do not treat every payment the same way. A card payment, a transfer you authorised after being deceived, a transfer made without your knowledge, a payment sent abroad and a purchase of cryptoassets sit under different regimes, carry different conditions and different exclusions, and a business customer is not always in the same position as an individual. The question the bank is answering is about the payment rather than about the person who took the money.

There is a practical trap in that conversation which costs people more than they expect. The account you give at the outset, typically typed into a form while you are shaken and before anyone has looked at the documents, becomes the version of events that everything afterwards is measured against, and later corrections are read as revisions to it. If the matter later goes to a complaint, and then to the ombudsman service for those eligible to use it, the same summary is still in the file. It is worth being accurate rather than fast, and accurate is harder than it sounds when you are describing something you have not yet fully understood.

The legal exercise looks the other way, at whoever received the money. In England and Wales, being induced to part with money by a lie told to you is a wrong in itself, and money that has moved on can in some circumstances be pursued into the hands of a recipient who took it knowing what it was, or who has no honest explanation for holding it. Those are real routes and they are demanding ones. They are also not alternatives to the bank claim: the two can be pursued at once, and the answer that arrives first is often not the answer that matters.

Where the money went decides more than how badly you were wronged

The same deception, worked identically on two people, can be substantially recoverable for one and not for the other, and the difference between them is where the funds ended up rather than anything about the wrongdoing.

Where money has come to rest with a business that holds funds for its customers, there is somebody who can be asked, and in the right circumstances required, to act. Where it has not, there is no such point of contact, and a complete account of what happened is of limited use without one. Cryptoassets follow the same logic rather than a separate one. What decides the position is whether there is anybody in the chain who can be compelled, rather than the technology involved or the sophistication of the fraud.

This is why the honest first question is where the money is. Identifying the person is frequently the achievable part, and frequently the least valuable, because the individual whose name is on the receiving account has often been used precisely for that purpose and owns nothing worth claiming against.

For a business, the loss may not sit where you think

Where a company has paid a genuine invoice into an account that turned out not to belong to its supplier, there is a second problem underneath the fraud, and it is usually the one with the money in it. The supplier has not been paid and still expects to be. Two innocent businesses are now arguing about which of them carries the loss, and that argument is a question of contract and of who bears responsibility for the compromise, decided under the law of England and Wales between two solvent parties who can both be found.

Businesses routinely spend their energy chasing the untraceable recipient while conceding, in early correspondence written by whoever happens to be handling it, the position that governs the argument they could actually win. There may also be insurance that responds, and policies of that kind tend to impose conditions about notification and about what may be said before the insurer is involved. The order in which those conversations happen is not a formality.

When not to spend

Some losses are not economically recoverable, and being told so plainly is worth more than encouragement. Where the sum is modest against the cost of any formal step, where the funds have gone somewhere with no custodian to compel, or where everyone identifiable has nothing to pay with, the correct advice is to stop. That is not the same as saying you were not wronged.

People who have lost money once are approached to lose it again. Unsolicited offers to recover funds for a payment made in advance, contacts who already know what happened to you, and services promising to trace what has been traced are a known pattern, and an approach arriving after a loss that was never made public deserves more suspicion than the approach that caused it. Legitimate work is not sold that way and does not begin with a fee to unlock your own money.

For an individual there is a further consideration, and it is rarely weighed properly. Pursuing a loss keeps the event present in your life. It requires you to revisit it, repeatedly, in order to explain it to other people, and it does not stop asking that of you while it runs. Some people should pursue it and some should not, and that is as much a decision about what the person can carry as about what the funds are worth.

This guide is general information about how these matters usually run. It is not advice, and nothing becomes advice until terms are agreed in writing. Brandleys Legal Ltd delivers reserved legal activities alongside regulated partners.