Partially upheld: fraud recovery and service failure complaint against Lloyds Bank Plc

Decision detail

Summary

D, a limited company, was victim of an email intercept scam resulting in a £3,340 loss in December 2024. Lloyds failed to properly log the fraud report, requiring D to report the fraud twice and causing delays in contacting the receiving firm. While this delay meant £437 in recoverable funds were lost, the receiving firm later recovered and returned £643.16 to D in March 2025, exceeding the preventable loss. The ombudsman found no financial loss requiring reimbursement but upheld the complaint regarding poor service, awarding £160 total compensation for inconvenience and service failures.

The Ombudsman's reasoning

While Lloyds' delay in logging the fraud claim properly meant that £437 in recoverable funds were lost, D ultimately received £643.16 from the receiving firm, which exceeds the amount that could have been prevented from being lost. Therefore, no financial loss resulted from Lloyds' error. However, Lloyds' poor service in handling the claim—including incorrect logging, requiring D to report twice, and failing to inform D of the recovery—caused inconvenience beyond what could reasonably be expected of fraud victims. Compensation for this service failure is appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website