Partially upheld: scam - investment fraud; failure to intervene appropriately complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6019983 of 2026-06-05T00:00:00+00:00. scam - investment fraud; failure to intervene appropriately complaint against Starling Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6019983 |
|---|---|
| Decision date | 2026-06-05T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | Current account |
| Claim type | scam - investment fraud; failure to intervene appropriately |
| Outcome | Partially upheld |
| Remedy | Starling Bank Limited directed to: (1) Refund 100% of payments one to five totalling £124,999 plus 8% simple interest from date of individual payments to date of return; (2) Refund 50% of payments six to twelve totalling £112,501.50 plus 8% simple interest from date of individual payments to date of return; (3) Provide tax deduction certificate if requested |
Summary
Mr B, an accountant and company director, lost £350,002 to an investment scam between May and June 2024 after being persuaded to invest in cryptocurrency through a fraudulent company. Starling Bank issued warnings when the first £25,000 payment was made but did not conduct sufficient human intervention despite the payment being significantly larger than previous transactions and involving cryptocurrency. The ombudsman found Starling should have intervened more thoroughly and that such intervention would likely have exposed the scam through examination of poor-quality documentation. However, after Mr B received a warning call on 3 June 2024 indicating the investment was fraudulent and expressed concern but continued making payments, he was found to share responsibility for subsequent losses. The ombudsman partially upheld the complaint, directing Starling to refund 100% of the first five payments (£124,999) and 50% of the remaining payments (£112,501.50), plus 8% interest on both amounts.
The Ombudsman's reasoning
Starling should have identified the first £25,000 payment as suspicious given it was significantly larger than previous transactions (largest prior being £7,084) and was to a new payee. The warnings Starling provided were not proportionate to the risk. Given Mr B's response indicating cryptocurrency investment, Starling should have conducted human intervention to ask more detailed questions about how he discovered the investment and what research he conducted. Such intervention would likely have exposed the scam through examination of the poor-quality documentation. However, after Mr B received the warning call on 3 June 2024 (around payment five) and expressed concern but continued making payments, he should share responsibility for subsequent losses. Mr B was an inexperienced investor despite his accounting background, and the scammers provided professional-looking documentation with FCA and FSCS references that would reasonably appear legitimate to a new investor. The high promised returns, while concerning, are not unusual in volatile cryptocurrency markets.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 980 | 25% |
| Current account, all decisions | 45,590 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website