Upheld: Card / payment disputes complaint against Paysafe Financial Services Limited

Decision detail

Summary

Mr B sold cryptocurrency via a peer-to-peer platform and received £465 into his Paysafe account. After sending the cryptocurrency to the buyer, Paysafe reversed the payment upon receiving notice of suspected fraud from the sending account and closed Mr B's account. The Ombudsman found that Mr B acted in good faith with no knowledge of the fraud and that Paysafe failed to discuss the specific payment's purpose before reversing it. Although Paysafe was entitled to investigate, it did not fairly apply its terms and conditions to an innocent recipient who had already parted with his cryptocurrency. The Ombudsman upheld the complaint and ordered a refund of £465.

The Ombudsman's reasoning

The Ombudsman found that Mr B's version of events was truthful and that he was engaged in a legitimate cryptocurrency sale in good faith. Although Paysafe was entitled to investigate the suspected fraud from the sending account, it failed to discuss the specific payment and its purpose with Mr B before reversing it. The terms and conditions relied upon by Paysafe did not fairly apply because there was no evidence Mr B was aware of or involved in the fraud. Mr B had a credible claim to ownership of the funds and had already suffered loss by parting with his cryptocurrency. An indemnity from the sending bank does not create an obligation to return funds and does not override the fairness consideration that Mr B was an innocent recipient.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website