Partially upheld: Fraud reimbursement (APP scams) complaint against Wirex Limited

Decision detail

Summary

Miss G was targeted by an investment scam ('Q') in August 2023 that promised £1,000-£2,000 weekly profits. She opened a Wirex e-money account and cryptocurrency wallet at the scammer's direction, transferring funds and exchanging them to cryptocurrency that was withdrawn to the scammer's wallet. After seeing a fraudulent platform balance of £22,000, she made additional deposits totalling £5,290 before the account was drained to zero. Miss G reported the scam in December 2023, but Wirex closed her account and denied liability, claiming she had authorised the transactions. The ombudsman upheld the complaint in part, finding Wirex should have intervened with a scam warning before the £5,000 transaction to the cryptocurrency exchange, as this presented clear multi-stage fraud indicators. However, Miss G was found 50% responsible for missing red flags. Wirex was ordered to refund 50% of losses plus interest and pay £150 compensation for unfair account closure and poor claims handling.

The Ombudsman's reasoning

As a payment services provider, Wirex was expected to process authorised transactions but also had regulatory duties to look out for fraud indicators and intervene appropriately. Although Miss G authorised the transactions, she did so under the scammer's influence for what she believed was legitimate. The £5,000 transaction to an external cryptocurrency provider on a newly opened account presented clear multi-stage fraud risk indicators that Wirex should have recognised, given the known prevalence of such scams by that time. A tailored scam warning using automated questions would likely have prompted Miss G to conduct further research, which would have revealed negative reviews and prevented the loss. However, Miss G bears 50% responsibility as she missed obvious red flags including unrealistic returns, the involvement of multiple account openings at different firms, and lack of due diligence on the investment opportunity. The account closure was unfair as Wirex could have determined the fraud report originated from Miss G herself, and she received no clear outcome on her fraud claim before having to escalate to complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website