Not upheld: scam/blackmail - failure to prevent fraud through inadequate warnings and intervention complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr R was victim of a sextortion scam where individuals threatened to release intimate images unless he paid money. He made 7 successful debit card payments totalling £3,510 to a money remittance service over a couple of hours, with over 20 payment attempts in total. HSBC declined to reimburse, citing that Mr R authorised the payments. The ombudsman found that while HSBC should have provided better automated warnings given the unusual payment pattern, no intervention would have prevented the loss because Mr R was under genuine fear of the threats and following the blackmailers' instructions. The complaint was not upheld, though HSBC's £300 compensation for service failings was deemed appropriate.

The Ombudsman's reasoning

While HSBC should have identified the unusual payment pattern and provided better automated warnings, the ombudsman concluded that no intervention would have made a material difference. Mr R was under intense emotional pressure and genuine fear of the threats, and was following the blackmailers' specific instructions on how and where to make payments. The nature of blackmail/sextortion means victims are unlikely to be deterred by generic warnings, as they perceive the threats as realistic and immediate. A chargeback claim would not have succeeded because Mr R authorised the payments and received the service he paid for (the money remittance service processed the transfers as instructed).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website