Not upheld: scam and fraud - refund liability complaint against PayPal UK Ltd

Decision detail

Summary

Mr M made four payments totalling £34,650 to a faith-based business 'MP' between July and September 2024, which he now believes was a scam. PayPal refunded only the final £9,650 payment under its Buyer Protection Policy but declined to refund the earlier payments made via 'Friends and Family'. The ombudsman found that while PayPal should have intervened to discuss the unusual transactions, there were no scam indicators apparent at the time that would have enabled PayPal to prevent the payments. The complaint was not upheld as PayPal could not reasonably have identified or prevented the alleged scam.

The Ombudsman's reasoning

Although PayPal should have intervened to discuss the unusual transactions as a matter of good industry practice, the ombudsman found that even if PayPal had intervened, it most likely would not have prevented Mr M from making the payments. This is because PayPal's intervention would have been limited to providing fraud and scams advice, and there was no information available at the time that would have indicated a scam. The website and courses could have been verified, and the reason for the payments did not present typical scam risk indicators that PayPal would be expected to be vigilant against. Therefore, PayPal could not reasonably have prevented the payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website