Not upheld: Account closure without notice complaint against Paysafe Financial Services Limited

Decision detail

Summary

Mr K opened a Paysafe account in 2019 via a third-party company (A) that he later discovered was a scam. In October 2022, Paysafe terminated his account and withheld his balance of over £2,000, requesting proof of address for the account details on file. Mr K could not provide this as the address was never his and was provided by the scam company. The ombudsman found that while Mr K's scam explanation was plausible, inconsistencies in the source and use of funds (particularly a £1,500 payment stated to be for emergency expenses but used for online purchases later refunded) meant Paysafe acted fairly in withholding the funds. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman accepted that Paysafe, as a strictly regulated entity, had legal and regulatory obligations requiring them to monitor accounts and could restrict access during reviews. While the ombudsman found Mr K's explanation about being scammed by company A plausible, they could not safely conclude Paysafe acted unfairly in withholding the funds. The ombudsman identified inconsistencies and concerns: the £1,500 stated to be for emergency living expenses was instead used for online purchases that were later refunded; the relative's Paysafe account used different names and email addresses; and there were inconsistencies in the refund documentation. These factors meant the ombudsman could not safely conclude Mr K was entitled to the funds.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website