Not upheld: Cifas fraud marker recording - alleged unfair recording of adverse information complaint against Starling Bank Limited

Decision detail

Summary

Mr K complained that Starling Bank unfairly recorded adverse information about him on the Cifas fraud database following the closure of his account. In May 2020, Mr K received a £1,000 payment from a company unrelated to his professional activities; when contacted in October 2022, he could not explain the payment but had spent the funds. Starling closed the account and recorded a Cifas marker for misuse of facility. The ombudsman upheld Starling's decision, finding that fraudulent funds had entered the account and that Mr K's inability to explain the payment, combined with his retention and spending of the funds despite having no business relationship with the sender, demonstrated complicity rather than unwitting receipt, meeting the threshold for recording a Cifas marker.

The Ombudsman's reasoning

To record a Cifas marker for misuse of facility, the bank must show reasonable grounds to believe a fraud or financial crime has been committed with clear, relevant and rigorous evidence. The bank must demonstrate the consumer was deliberately dishonest and knew or might have known the payment was illegitimate. The ombudsman was satisfied fraudulent funds entered the account and that Mr K's inability to explain why he received funds from an unrelated company, combined with his retention and spending of those funds, demonstrated complicity rather than unwitting receipt. The ombudsman concluded Starling was entitled to record the marker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website