Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr D lost £9,534.54 to a cryptocurrency investment scam between July and November 2024, making multiple payments from his HSBC account to legitimate cryptocurrency providers in his name, which were subsequently moved to scammers. HSBC intervened on two payments with warnings but allowed others to proceed. The ombudsman found HSBC acted fairly because the individual payments were modest (mostly under £1,200), the frequency and pattern over five months did not suggest fraud, and HSBC had already provided proportionate warnings. The ombudsman also noted that applicable reimbursement schemes do not cover payments to accounts held by the customer, and there was no realistic prospect of fund recovery.

The Ombudsman's reasoning

The ombudsman found that HSBC was not obligated to reimburse Mr D because: (1) the CRM Code and PSR scheme do not apply to payments sent to accounts held by the customer; (2) the payments were not sufficiently suspicious in value, frequency, or pattern to warrant intervention beyond what HSBC already provided; (3) while cryptocurrency carries fraud risks, not all cryptocurrency payments are scams and HSBC should not intervene on that basis alone; (4) the receipt of some credits from cryptocurrency providers suggested legitimacy; (5) HSBC already provided proportionate warnings on two payments; and (6) there was no realistic prospect of fund recovery as payments went to accounts in Mr D's name then to scammers.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website