Not upheld: Scam / Unauthorised transactions / Fraud prevention complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr D lost £6,166.32 to a sophisticated scam where a fraudster impersonated a legitimate travel agent, claiming his original flight booking payments had failed and later promising refunds. The scammer obtained Mr D's card details and OTPs, resulting in multiple payments to legitimate merchants on 31 May and 14 June 2025. Mr D reported the scam to HSBC on 14 June 2025. The ombudsman did not uphold the complaint, finding all payments were authorised under the Payment Services Regulations 2017 because Mr D consented to provide his card details, even though deceived about the circumstances. HSBC was not required to prevent the payments or provide recovery through chargeback or section 75 claims. HSBC was reminded to treat Mr D sympathetically regarding his outstanding balance given his financial difficulties.

The Ombudsman's reasoning

Under the Payment Services Regulations 2017, payments are authorised when a customer consents to them, even if deceived about the context. Mr D clearly consented to provide his card details and OTPs to the scammer, understanding that payment would be taken. The on-screen prompts for the 14 June payments were clear and unambiguous, displaying amount and merchant before confirmation. HSBC was entitled to rely on Mr D's in-app confirmations as representation of consent. The payments did not appear particularly concerning given their value relative to Mr D's usual spending, were made to legitimate merchants, and were confirmed within the app. HSBC had no obligation to prevent authorised payments. Chargeback was unlikely to succeed as merchants likely provided goods/services. Section 75 claim failed as Mr D had no contractual relationship with merchants and no evidence of breach. Service issues did not constitute significant failings warranting compensation, as much distress was caused by the fraudster's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website