Not upheld: scam - failure to prevent or stop fraudulent payments complaint against Starling Bank Limited

Decision detail

Summary

Miss H complained that Starling Bank failed to refund the full amount of money she lost to a scam involving fraudulent task-based job payments. Starling had refunded some payments as a gesture of goodwill but refused to refund all of them. The ombudsman found that the individual payments were not of sufficient value or characteristic to trigger Starling's automatic payment checking systems, and the payments were spread across different days without typical scam indicators. Although Miss H was experiencing personal difficulties, Starling had no prior knowledge of vulnerabilities. The ombudsman determined that Starling did nothing wrong and that the partial goodwill refund already provided was more than fair, so the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which establish that consumers are generally liable for authorised payments. While banks have obligations to protect customers from fraud, it is not realistic to check every payment. The individual payments were not of sufficient value or characteristic of fraud to trigger automatic checking systems. The payments were spread across different days and did not show typical scam patterns. Starling's goodwill refund of some payments exceeded what would have been recommended.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website