It is a comfort to suppose that, should some villain raid your bank account and make off with half your life savings, you will get the money back from head office coffers. The Banking Code is explicitly soothing on the issue: fraud victims are only liable for the first £50 of their losses unless they acted without reasonable care, and it is up to the bank to demonstrate any such negligence. Anna Tims, The Guardian.

As Tims goes on to report, banks rely on the fact that few of their customers know the rules – for instance Lloyds refused to refund a customer until Tims sent them a copy of the Banking Code.

Still it’s not just the Banking Code as Tims also reports if your account is overdrawn then you’re also protected by the Consumer Credit Act 1974.

This states that if a stolen card was used as a “credit token”, the owner is again liable only for the first £50 of any losses. And it is deemed to have been used as a credit token if it was used to remove funds from an overdrawn account. Anna Tims, The Guardian.

So if your account is overdrawn

The act takes precedence over the Banking Code, according to the Financial Services Ombudsman. Anna Tims, The Guardian.

As Tims writes

So there are two lessons here: one, spend a night or two with the Consumer Credit Act and the Banking Code so you are well armed against banking deviousness. And two, it can sometimes pay to be overdrawn! Anna Tims, The Guardian.