Not upheld: unauthorized transaction / fraud claim complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr A complained that Barclays unfairly declined to refund a £1,300 cryptocurrency transaction he claimed was made by an unknown third party who briefly took his unlocked phone. Barclays initially refunded the amount but later retrieved it after investigating, concluding Mr A had authorized the transaction because it was made via his digital wallet using his device, which he had used for genuine transactions, and his banking app was accessed with his passcode immediately before and after the disputed payment. The ombudsman upheld Barclays' decision, finding that a third party could not have completed the payment without knowing Mr A's passcodes, which would have been implausible to guess in approximately 60 seconds, and that the technical evidence supported Mr A's authorization of the transaction. The ombudsman found the £50 compensation already paid for service failures to be appropriate and declined to order any further remedy.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which require a bank to prove both that a transaction was authenticated and that the consumer consented to it. The ombudsman found that while the transaction was authenticated via Mr A's digital wallet on his device, the critical question was whether Mr A consented. The ombudsman concluded that a third party could not have completed the payment without Mr A's involvement because: (1) they would have needed to know or guess Mr A's digital wallet passcode, which was implausible given thousands of possible combinations and only 60 seconds of access; (2) they would have needed to access Mr A's banking app with a different passcode to check his balance before making the £1,300 payment, which was equally implausible; and (3) the technical evidence showed the transaction occurred on Mr A's device with his genuine device number, not via NFC technology on another device. The ombudsman rejected Mr A's NFC theory based on technical evidence and concluded on the balance of probabilities that Mr A authorized the transaction.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website