Not upheld: Fraud reimbursement (APP scams) complaint against Cater Allen Limited

Decision detail

Summary

C, a limited company, complained that Cater Allen failed to protect it from losing £10,000 to a cryptocurrency investment scam. Mr P, C's director, made three payments from C's business account to a fraudulent investment platform after being contacted by scammers. Cater Allen intervened once to verify a payment but did not ask probing questions or provide scam warnings. The ombudsman found that although the payments came from C's business account, Mr P was investing in his personal capacity based on the personal information he provided to the scam platform and his stated personal investment aim. Since C did not suffer a financial loss as a separate legal entity, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that while the payments were drawn from C's business bank account, the evidence demonstrates Mr P was investing in his personal capacity, not on behalf of C. The sign-up information Mr P provided to L contained only personal details and stated a personal investment aim (paying off a mortgage). Critically, Mr P provided a different bank name when asked who he banked with, indicating the investment was not intended to be held in C's name. Therefore, any losses Mr P suffered from the scam were personal losses, not losses suffered by C as a separate legal entity. Since C did not suffer a financial loss as a result of Cater Allen's actions, the complaint cannot be upheld.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website