Not upheld: Fraud reimbursement (APP scams) complaint against TSB Bank plc

Decision detail

Summary

Mrs T complained that TSB failed to reimburse a payment she claimed was part of a scam after she attempted to book a hotel through an intermediary website. Although Mrs T did not complete the stronger authentication approval when she noticed the amount was higher than expected, the merchant re-attempted the payment without requiring further authentication, and it was processed. The ombudsman determined the payment was authorised under the Payment Services Regulations 2017 because Mrs T had consented by entering her card details and did not withdraw that consent before the re-attempted payment. TSB's chargeback was reasonably defended by the merchant with booking evidence, and the ombudsman found TSB was not required to do more to prevent or recover the payment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017 framework, which establishes that a payment is authorised if correctly authenticated and the payer consents. The payment was correctly authenticated using Mrs T's card information, and consent was given when Mrs T entered her card details on the website. Although Mrs T did not complete the stronger authentication approval for the initial attempt, she did not decline it or withdraw her consent before the re-attempted payment was processed. TSB had no way of knowing Mrs T had concerns about the payment amount. The payment was not suspicious enough to warrant additional fraud checks given it was a one-off, relatively low-value transaction. The chargeback raised by TSB was reasonably defended by the merchant with evidence of the booking, so TSB was not unreasonable in not pursuing further recovery.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website