Not upheld: Fraud reimbursement (APP scams) complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs B complained that Lloyds Bank PLC failed to prevent her loss of £17,600 to an investment scam. She was contacted by a scammer, persuaded to download screen sharing software, and made four payments to a fraudulent account. Lloyds intervened on the third and fourth payments with phone calls asking about downloading software and being asked to lie to the bank, which Mrs B falsely denied. Bank S notified Lloyds on 18 February 2025 that Mrs B might be a scam victim, but the fourth payment had already processed less than twenty minutes earlier. The ombudsman found Lloyds' interventions were proportionate and reasonable, and that Mrs B's false answers meant no further intervention would have prevented her from proceeding. The complaint was not upheld, and no refund was ordered.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which establish that customers are responsible for authorised payments, but firms should take proportionate steps to warn customers about unusual transactions. Lloyds' interventions on payments three and four were proportionate, accurately describing the investment scam and asking appropriate questions. Although Mrs B was vulnerable due to recent bereavement and was under the scammer's influence, she provided false answers to direct questions about downloading software and being asked to lie to the bank. The ombudsman found that even if Lloyds had intervened earlier (e.g., at payment two), it would not have prevented Mrs B from proceeding given her state of mind. Regarding the 18 February 2025 email from Bank S, the ombudsman found that Lloyds could not reasonably be expected to act within the less than twenty minutes before payment four was processed, and appropriately blocked the subsequent payment attempt two days later. The scammers, not Lloyds, caused the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website