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

Decision detail

Summary

Mr D lost £10,459.32 to a safe account scam after receiving a fraudulent call impersonating his bank, which persuaded him to transfer funds through his Caxton account to what he believed were secure accounts but were actually retail merchants. Caxton recognised the payments as unusual and sent OTPs but failed to conduct human intervention or provide scam warnings. The ombudsman found Caxton should have intervened on the first payment and that such intervention would likely have prevented the loss. However, Mr D also failed to verify the call's authenticity and should have questioned the inconsistencies, leading to a 50% contributory negligence reduction. Caxton was ordered to pay £5,229.66 plus interest.

The Ombudsman's reasoning

The ombudsman found that whilst Mr D authorised the payments, Caxton should have recognised the increased risk of fraud or scam based on the unusual nature of the transactions relative to account history. The first £7,400 payment, combined with the recent £10,000 deposit, should have triggered human intervention rather than just an OTP. Had Caxton intervened and asked questions about the payment purpose, Mr D would likely have disclosed the call from 'Bank B' and Caxton could have warned him about safe account scams, which would more likely than not have prevented the loss. However, Mr D bore contributory responsibility for not verifying the call was genuine before proceeding, not questioning why Bank B couldn't resolve the issue directly, and not noticing the OTP messages indicated retail merchants rather than a bank account. The ombudsman applied a 50% reduction for contributory negligence.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website