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

Decision detail

Summary

Mr A fell victim to an investment scam orchestrated via messaging application by someone claiming to represent company X. Over four months, Mr A made 16 payments totalling £48,665.00 to cryptocurrency exchanges and other recipients, funded through borrowing from friends, family, and a bank loan. Lloyds intervened on 16 May 2025 when Mr A attempted large payments, warning him he was likely being scammed, but Mr A provided false information about payment purposes and continued making payments through alternative methods. The ombudsman found that although Lloyds should have intervened earlier with warnings on larger payments, any intervention would have been ineffective given Mr A's demonstrated determination to proceed regardless of warnings and his willingness to provide false information to circumvent controls.

The Ombudsman's reasoning

The ombudsman accepted that Mr A authorised the payments but acknowledged that banks have a duty to protect against fraud. The ombudsman found that Lloyds should have intervened with a tailored warning at payment 11 (£4,000) and should have discussed larger subsequent payments with Mr A. However, the ombudsman concluded that any intervention would have been ineffective because Mr A demonstrated a clear determination to proceed with payments regardless of warnings. The ombudsman noted that Mr A provided false information to circumvent bank controls, was warned by both Lloyds and his other bank provider that he was likely being scammed, yet continued to find alternative methods to make payments. The ombudsman found that Mr A's willingness to provide false information made it very difficult for banks to uncover the scam, and that Mr A would likely have found another way to make the payments even if Lloyds had prevented them.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website