Not upheld: Fraud reimbursement (APP scams) complaint against eToro Money UK Ltd

Decision detail

Summary

Mrs B fell victim to an investment scam after clicking on a celebrity-endorsed advert. The scammers built rapport with her, gained access to her devices, and persuaded her to open an eToro account and make multiple transfers to a cryptocurrency provider account. She made six payments from eToro, with the final £9,000 transfer occurring after she was falsely told she was under HMRC investigation. The ombudsman found that while eToro should have intervened on the sixth payment due to suspicious withdrawal patterns, such intervention would not have prevented the loss because Mrs B was being coached by scammers and had already provided dishonest answers to similar interventions from Bank X and the cryptocurrency provider. The complaint was not upheld as the funds could not be recovered and any warning would have been ineffective.

The Ombudsman's reasoning

While eToro should have had fraud detection systems that would have been triggered by payment six (the $2,795 withdrawal following three rapid withdrawals totalling $8,685), the ombudsman found that even a proportionate intervention with automated scam-detection questions would not have prevented the loss. This is because Mrs B had already demonstrated with both Bank X and the cryptocurrency provider that she would provide dishonest answers when questioned, as she was being coached by the scammers. The ombudsman noted Mrs B was 'under the spell of the scammer' and would not have heeded warnings. Additionally, eToro was not aware of Mrs B's vulnerabilities, and the funds could not be recovered as they had already been transferred to another user by the cryptocurrency provider.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website