Questions of cash: A fraudster spent a small fortune on my debit card

I signed up with Cahoot's savings account because of its good interest rate and because it has a debit card. In February I was phoned by the bank because of the high number of unusual transactions on the card, but I have only used it once. It turns out that my card was cloned and used fraudulently in France. I had £68,500 in the account, but when I checked it was down to £38,000 and a few days later payments were still being processed by the bank, taking the balance down to £14,000. Now I find that my balance is £3,500 overdrawn! Why couldn't the bank have refused to carry out transactions after they learnt the card had been cloned? I have written and phoned Cahoot several times, but I have not had the courtesy of a response. PS, Hampshire.

Money net

Q I signed up with Cahoot's savings account because of its good interest rate and because it has a debit card. In February I was phoned by the bank because of the high number of unusual transactions on the card, but I have only used it once. It turns out that my card was cloned and used fraudulently in France. I had £68,500 in the account, but when I checked it was down to £38,000 and a few days later payments were still being processed by the bank, taking the balance down to £14,000. Now I find that my balance is £3,500 overdrawn! Why couldn't the bank have refused to carry out transactions after they learnt the card had been cloned? I have written and phoned Cahoot several times, but I have not had the courtesy of a response. PS, Hampshire.

A Cahoot suggests your criticism is unfair, though it is sorry you suffered the fraud. It points out that it was proactive in spotting and ending the fraudulent use of your card. Cahoot froze your account, but is obliged by Visa rules to honour transactions already in the pipeline. The bank says that since your letter to us it has fully reimbursed you with the stolen funds, plus interest. While this would not help you, Cahoot is encouraging customers to use its recently launched web card for online transactions, which it claims will "virtually eliminate" internet fraud.

Q I am following with interest the debate in Your Money's Questions of Cash column (16 and 23 March) regarding tax-free gifts. Please could you say whether the recipients of cash gifts that are worth above £3,000 annually are required to declare them to the Inland Revenue? Where a gift is not tax-free [because the donor dies within seven years of a gift over £3,000] what amount of tax does the recipient pay? SC, Kent.

A Ruth McCarthy, tax adviser with the accountant Bentley Jennison, says that there is no need initially for the recipient to notify the Inland Revenue. If the donor dies within seven years, the recipient will become liable to pay the inheritance tax due on the gift. She adds that often donors will plan for this by either providing an additional legacy in the will to cover the tax due, or by taking out a life insurance policy that will meet the cost. In the last financial year, inheritance tax was payable at the rate of 40 per cent where an estate has a total value that exceeds £242,000. The threshold for the current financial year will be announced by the Chancellor of the Exchequer in the Budget on 17 April.

Q I am selling my home and will make about £30,000 net profit. I do not intend immediately to buy another property, but want to put the proceeds into a high-interest account or fund or scheme to give me the most income over a six-month period. I have been given different opinions on whether I will have to pay Capital Gains Tax (CGT) on the profit that I raise from the sale of the property. Can you advise? SS, London

A Matthew Carden, the technical director of Inter-Alliance, the independent financial advisers, says "With the short time that you have to invest, it is probably best to look for a bank account that pays high monthly interest so that you do not have to suffer a penalty for short notice withdrawal. Abbey National's internet-only eSaver Account offers 4.17 per cent for the initial six months, with no notice period. Standard Life pays 4.05 per cent with 50 days' notice and Teachers' Minster 60 account offers 4.07 per cent with a 60-day period for deposits for £20,000 to £40,000. Your Capital Gains Tax liability will depend on whether the property is your main residence. If it is and has been your main residence throughout the period of your occupancy, there is no CGT to pay. If the house was previously your main residence, and you sell within three years of moving out of it, there is no CGT payable. If, on the other hand, you sell the property more than three years after moving out, then CGT is payable on all time periods, except the periods of residence and, of course, the last three years of ownership."

If you have any questions about personal finance topics or problems, please write to Questions of Cash, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail cash@independent.co.uk. We regret that we can reply only to letters published here. Please send copies, not originals, as we cannot undertake to return material.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

    The saffron censorship that governs India

    Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
    Prince Charles' 'black spider' letters to be published 'within weeks'

    Prince Charles' 'black spider' letters to be published 'within weeks'

    Supreme Court rules Dominic Grieve's ministerial veto was invalid
    Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

    How did fandom get so dark?

    Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
    The galaxy collisions that shed light on unseen parallel Universe

    The cosmic collisions that have shed light on unseen parallel Universe

    Dark matter study gives scientists insight into mystery of space
    The Swedes are adding a gender-neutral pronoun to their dictionary

    Swedes introduce gender-neutral pronoun

    Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
    Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

    Disney's mega money-making formula

    'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
    Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

    Lobster has gone mainstream

    Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
    Easter 2015: 14 best decorations

    14 best Easter decorations

    Get into the Easter spirit with our pick of accessories, ornaments and tableware
    Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

    Paul Scholes column

    Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
    Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

    The future of GM

    The greenhouses where Monsanto 'plays God' with the future of the planet
    Britain's mild winters could be numbered: why global warming is leaving UK chillier

    Britain's mild winters could be numbered

    Gulf Stream is slowing down faster than ever, scientists say
    Government gives £250,000 to Independent appeal

    Government gives £250,000 to Independent appeal

    Donation brings total raised by Homeless Veterans campaign to at least £1.25m
    Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

    The most borrowed book at Bank of England library? Oh dear

    The book's fifth edition is used for Edexcel exams
    Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

    Cowslips vs honeysuckle

    It's the hunt for UK’s favourite wildflower
    Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

    Did a botched blackmail attempt help Cyril Smith escape justice?

    A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss