Not upheld: failure to protect against scam / failure to identify vulnerable customer and intervene complaint against J.P. Morgan Europe Limited trading as Chase

Decision detail

Summary

Mrs S lost approximately £60,000 to two unregulated forex trading platforms through over 300 payments made between October 2023 and the time of complaint. She claimed Chase should have refunded her losses as a scam victim and should have intervened to protect her from compulsive spending behaviour linked to poor mental health. The ombudsman rejected both arguments, finding insufficient evidence that the platforms were fraudulent (as they appeared to operate as legitimate unregulated investment businesses with some regulatory oversight elsewhere and returned substantial funds to Mrs S), and concluding that Chase could not reasonably have identified Mrs S's specific vulnerability or compulsive spending patterns from the transaction activity alone.

The Ombudsman's reasoning

The ombudsman applied a two-stage test: first, whether this was an APP scam, and second, whether the bank should have intervened based on spending patterns. On the first issue, the ombudsman found insufficient evidence of fraud because the platforms appeared to be operating as legitimate investment businesses subject to regulatory oversight elsewhere, and the scale of returns Mrs S received was atypical of investment scams. On the second issue, while acknowledging the high volume and frequency of transactions, the ombudsman concluded that even if Chase had intervened, it would likely have explored fraud concerns rather than identifying compulsive spending linked to mental health, and there was no evidence the bank had actual or constructive knowledge of Mrs S's specific vulnerabilities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website