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

Decision detail

Summary

B, a limited company represented by director Mr T, complained that Lloyds Bank Plc failed to prevent losses when over £1,000,000 was transferred to an accountant's client account held with Lloyds, which was subsequently misappropriated. The ombudsman found that B had no direct relationship with Lloyds beyond sending payments to the account, the CRM code protections did not apply as B exceeded micro-enterprise thresholds, and the account's transaction pattern was consistent with legitimate client account activity. The ombudsman concluded that Lloyds had no reasonable basis to intervene or question the transactions and therefore was not liable for reimbursement.

The Ombudsman's reasoning

The ombudsman found that B did not have a direct relationship with Lloyds beyond sending payments to an account held with them. The CRM code protections did not apply as B exceeded the micro-enterprise threshold. The account's transaction pattern was consistent with legitimate client account activity, and B's transactions did not stand out as significantly unusual. There was no significant or obvious risk that Lloyds failed to notice or act upon. By the time the scam was reported, the funds had already been moved on.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website