Not upheld: scam and fraud - refund of losses complaint against HSBC UK Bank Plc trading as first direct

Decision detail

Summary

Mr M complained that First Direct should refund money he lost to an investment scam after being contacted via messaging application and directed to make payments to a fraudulent trading platform. The ombudsman accepted Mr M fell victim to a cruel scam but found that the disputed payments of £250 and £3,000 were authorised by Mr M and were not of such substantial value or out of keeping with his normal account usage to trigger First Direct's fraud prevention systems. The ombudsman concluded that while sympathising with Mr M's loss, First Direct had no reasonable grounds to intervene and the scammers, not the bank, caused the loss. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman accepted that Mr M authorised the payments and was the victim of a scam. However, the starting point is that Mr M is responsible for authorised payments. The ombudsman considered whether First Direct should have reasonably prevented the payments through fraud prevention systems. The payments were not of substantial value or out of keeping with normal account usage, so they would not reasonably have triggered First Direct's fraud prevention systems. The ombudsman concluded that the scammers caused the loss, not First Direct's failure to intervene, and that First Direct would not reasonably have had concerns about the payments at the time they were made.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website