Not upheld: Fraud reimbursement (APP scams) complaint against Tide Platform Limited

Decision detail

Summary

O Ltd, a business customer of Tide Platform Limited, was the victim of a phishing scam on 10 May 2024 where a fraudster impersonated a Tide advisor and manipulated Mr D into authorising two card payments totalling £4,536.99: £45 to an e-commerce business and £4,491.99 to an international money transfer service. Mr D reported the scam immediately, and Tide raised a chargeback for the £45 payment which was successful but not processed, while refusing to refund the larger payment citing 3DS verification. The ombudsman found that Mr D had properly authorised both payments under the Payment Services Regulations 2017 by entering his security code and confirming the transactions in the Tide app, and that Tide was not required to intervene as the payments were consistent with the account's prior transaction history. The ombudsman ordered Tide to refund the £45 payment plus £50 compensation if not already done, but did not uphold the complaint regarding the £4,491.99 payment as recovery was impossible given the funds were transferred internationally within minutes.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017 as the relevant legal framework, finding that Mr D had properly authenticated and consented to the £4,491.99 payment by entering his security code and selecting 'Approve payment' in the Tide app, despite being deceived about the purpose. While sympathising with Mr D's situation, the ombudsman determined that deception alone does not negate authorisation under the Regulations. The ombudsman found that Tide was not required to intervene because: (1) the payment amount was consistent with O Ltd's prior transaction history; (2) international payments by businesses are not inherently suspicious; (3) the payment did not drain the account; and (4) the money transfer service was FCA-regulated. The ombudsman also determined that recovery would have been impossible given the funds were transferred internationally within minutes and chargebacks would not succeed for money transfer services. The ombudsman rejected arguments based on the CRM Code (to which Tide was not a signatory) and the October 2024 PSR rules (which were not retrospective and did not apply to card payments).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website