Upheld: scam - investment fraud, inadequate intervention on cryptocurrency payments complaint against J.P. Morgan Europe Limited trading as Chase

Decision detail

Summary

Mrs E lost £349,000 to an investment scam involving cryptocurrency trading with promised 130% returns between June 2023. She made 8 payments from her Chase account, with payments one to five (£185,000) triggering system alerts as cryptocurrency-related transactions. When Chase intervened on payment one, Mrs E falsely claimed it was for French property renovation work. Chase later offered 50% refund on payments six to eight but refused payments one to five. The ombudsman upheld the complaint, finding Chase should have probed further given the cryptocurrency alerts and false explanation, and likely would have uncovered the scam. However, Mrs E shares 50% responsibility due to red flags including being asked to lie to the bank, unrealistic returns, and suspicious identity documents, resulting in a 50% refund of payments one to four (£67,500) plus interest.

The Ombudsman's reasoning

Chase had a duty to exercise reasonable skill and care and identify potential risks of financial harm from fraud. Although payments went to accounts in Mrs E's name, this does not negate Chase's responsibility. Chase's system identified the payments as cryptocurrency-related, and when they intervened on payment one, Mrs E gave a false explanation. Chase should have probed further and requested evidence, which would likely have uncovered the scam. However, Mrs E also bears responsibility as she should have questioned why a legitimate investment would require her to lie to her bank, the unrealistic 130% return, and the suspicious provision of a broker's passport copy.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website