Not upheld: unauthorized transactions / coercive control complaint against Bank of Scotland plc (trading as Halifax)

Decision detail

Summary

Miss G complained that six transactions made from her Halifax account in November 2021 were unauthorized because they were made under coercive control from her abusive ex-partner. She argued Halifax should have flagged the unusual payments to cryptocurrency platforms and her ex-partner as suspicious and questioned them. Halifax empathized with her situation but refused to refund the transactions, offering £500 compensation for handling delays. The ombudsman found that under the Payment Services Regulations 2017, the transactions were properly authenticated and consented to, as Miss G herself made them via online banking. Although acknowledging her distressing circumstances, the ombudsman determined that coercion does not render payments unauthorized under the regulations, and that Halifax had no way of knowing about the coercive control situation. The complaint was not upheld.

The Ombudsman's reasoning

Under PSR 2017, transactions require authentication and consent to be deemed authorized. Authentication was not disputed as Miss G made the payments herself via online banking. Regarding consent, the regulations distinguish between the payment transaction itself and the underlying relationship between payer and payee. Coercion or duress does not usually make a payment transaction unauthorized under PSR 2017. Halifax had no way of knowing about the coercive control situation as there was no police report or business notes indicating this. Even if Halifax had questioned the payments, the ombudsman found Miss G would likely have concealed the true situation and proceeded with the payments due to fear. The call handlers demonstrated appropriate empathy and sensitivity.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website