Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss M lost £2,113.20 to a scam travel company and requested HSBC reimburse her. HSBC raised a chargeback claim which was rejected by the merchant, who claimed they had provided flights. Miss M then signed a form cancelling the dispute, later claiming she had ticked the wrong box. The ombudsman found that HSBC was not liable to reimburse the scam funds as the payment was authorised and not unusually suspicious, and that HSBC reasonably cancelled the chargeback when requested. However, the ombudsman acknowledged HSBC provided poor service by passing Miss M between departments, and the £150 compensation already paid was appropriate.

The Ombudsman's reasoning

The ombudsman applied the legal starting position that customers are responsible for authorised transactions, even if made to scammers. While HSBC has a regulatory duty to protect customers from fraud, the £2,113.20 payment was not so unusual or out of character compared to Miss M's genuine account activity to warrant intervention. Regarding the chargeback process, HSBC acted reasonably by raising the claim and passing it to the merchant. When Miss M signed the form selecting to cancel the dispute, HSBC reasonably cancelled the claim, even though Miss M later claimed this was an error. Once cancelled, chargebacks cannot be reinstated. However, HSBC did provide poor service by passing Miss M between departments without staff fully understanding her dispute, justifying the £150 compensation already paid.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website