Not upheld: Authorised Push Payment (APP) scam - refund liability complaint against Wise Payments Limited (trading as Wise)

Decision detail

Summary

Mr H complained that Wise failed to refund €8,553 he lost in an APP scam involving an international payment for holiday chalet rental. After the beneficiary became unresponsive, Mr H reported the scam to Wise, which declined to refund the loss. The ombudsman found that while Payment Service Providers must have fraud prevention systems, the payment was not sufficiently suspicious to warrant additional intervention. The payment amount was consistent with Mr H's previous transaction history, it was a single international transfer typical for Wise's customer base, and Wise had provided an appropriate warning. The ombudsman noted that international payments are excluded from the Reimbursement Rules and that Wise could not have reasonably identified the beneficiary account as fraudulent. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the starting legal position that an Electronic Money Institution must process authorised payments, with the customer presumed liable for losses in the first instance. While acknowledging that Payment Service Providers must have systems to protect customers from fraud, the ombudsman found that the €8,553 international payment was not sufficiently suspicious to warrant additional intervention beyond the warning Wise provided. The payment amount was consistent with Mr H's previous transaction history, it was a single payment rather than part of a suspicious pattern, and international transfers are typical for Wise's customer base. The ombudsman also noted that international payments are excluded from the Reimbursement Rules, and that Wise could not have reasonably known the beneficiary account was controlled by fraudsters. The delay in recovery attempts was not found to have caused detriment given the typical practice of fraudsters moving funds quickly and the weeks that had already passed before Mr H reported the scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website