Not upheld: fraud and scam protection; failure to intervene in suspicious payment patterns complaint against Starling Bank Limited

Decision detail

Summary

Miss C complained that Starling Bank Limited failed to protect her from financial harm when she lost money investing in binary options through Company P over a ten-month period, culminating in 21 payments in September and October 2025. She argued that Starling should have scrutinised her spending pattern and intervened after discovering an FCA warning about Company P's unauthorised status. The ombudsman found that while binary options trading is high-risk and the FCA has regulatory concerns, there was insufficient evidence that Company P was operating fraudulently or that Miss C was a victim of a scam rather than losing money in a high-risk investment. The ombudsman determined that Starling's primary obligation was to execute Miss C's authorised payment instructions and that intervention was not warranted given the modest individual amounts, the established nature of the payee, and the absence of vulnerability indicators. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while binary options trading is high-risk and the FCA has regulatory concerns about such investments, there was insufficient evidence meeting the high legal threshold and burden of proof that Company P was operating fraudulently or that Miss C was a victim of a scam. Although unregulated binary-options traders may use unethical sales methods and payment disguise tactics, these do not necessarily constitute fraud. The ombudsman determined that Starling's primary obligation was to execute Miss C's authorised payment instructions without delay, and that intervention was not warranted given the relatively low individual amounts, the established nature of the payee, and the absence of indicators that Miss C was vulnerable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website