Not upheld: scam and fraud - bank's liability for authorised payments to scammers complaint against Lloyds Bank PLC

Decision detail

Summary

Miss S complained that Lloyds Bank PLC should refund approximately £1,000 she lost to scammers who posed as employers offering remote work. Lloyds stopped her initial £900 payment attempt, but after Miss S falsely reassured them it was legitimate, a £1,000 payment to her remittance service account went through and was subsequently transferred to scammers abroad. The ombudsman found that Miss S authorised the payment, Lloyds took reasonable intervention steps, and critically, Miss S would likely have proceeded regardless due to her demonstrated determination to complete transfers and willingness to mislead fraud prevention staff at multiple firms. The complaint was not upheld and no reimbursement was ordered.

The Ombudsman's reasoning

Although Miss S was manipulated by scammers, she authorised the payments under Payment Services Regulations and is liable in the first instance. Lloyds did intervene and stop most attempted payments to remittance services, going beyond minimum requirements. The successful £1,000 payment followed Miss S's reassurance to Lloyds that it was legitimate and was not large enough to raise particular concern given her previous payment history. Critically, Miss S repeatedly misled fraud prevention staff at multiple firms by following scammers' instructions, was proactive in seeking advice on how to deceive firms, and demonstrated determination to complete payments through alternative providers when blocked. Even if Lloyds should have intervened further, it is more likely than not that Miss S would have proceeded regardless. Miss S's vulnerabilities were unknown to Lloyds at the time and could not have been reasonably foreseen. Recovery was not possible as funds had been sent abroad via Miss S's own remittance accounts and were not covered by CRM Code or latest PSR rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website