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

Decision detail

Summary

Mr R, a previous scam victim, fell victim to an elaborate recovery scam where fraudsters convinced him they could recover his lost funds for a fee payable in cryptocurrency. The scammers obtained remote access to his laptop and Wirex account, directing him to make approximately £102,000 in crypto transactions to external wallets between 11-31 July 2023. Mr R complained to Wirex seeking a refund, arguing they should have intervened given the high-risk nature of crypto transactions. The ombudsman found that Wirex should have provided automated warnings and human intervention but concluded that such interventions would not have prevented the losses because the scammers controlled Mr R's device, Mr R was determined to proceed despite awareness of scam risks, and he was willing to provide false information to his building society, demonstrating his deep commitment to the scheme.

The Ombudsman's reasoning

The ombudsman found that although Wirex should have implemented proportionate interventions (automated warnings from payment 1, educational information from payment 2, and human contact from payment 3 onwards) under Payment Services Regulations 2017 and Consumer Duty, such interventions would not have prevented Mr R's losses. This is because: (1) scammers had control of Mr R's device and could answer questions on his behalf; (2) Mr R was aware of scams but convinced he would recover his money; (3) Mr R felt threatened and feared losing his funds if he disclosed information; (4) Mr R was willing to send false correspondence to his building society, demonstrating his commitment to the scam; and (5) once funds were converted to crypto and sent to external wallets outside UK jurisdiction, recovery was impossible.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website