Upheld: Failure to prevent Authorised Push Payment (APP) fraud; inadequate account monitoring and transaction controls complaint against Leatherback Ltd

Decision detail

Summary

M, a self-invested personal pension, lost £148,288.25 to APP fraud when a fraudulent invoice caused them to send funds to an account held with Leatherback Ltd. Leatherback eventually ringfenced £93,026.25 and returned it, but declined to reimburse the remaining £55,352. The ombudsman found that Leatherback should have restricted the account after an attempted £50,000 transaction was declined, which would have prevented £39,270 in further losses. Crediting the pensions administrator's 20% payment, the ombudsman upheld the complaint and ordered Leatherback to pay £31,416 plus interest.

The Ombudsman's reasoning

Leatherback had ongoing regulatory obligations to monitor accounts for signs of financial harm. While the initial large deposit and early dispersals were not unreasonable, the attempted £50,000 transaction two minutes after the £9,000 payment presented very reasonable concerns about account risk. Leatherback should have restricted payments at that point rather than 20 minutes later. Had they done so, £39,270 in further transactions would have been prevented. The pensions administrator's 20% payment is credited, leaving Leatherback liable for 80% of the preventable loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website