Not upheld: scam/fraud loss recovery - refund claim complaint against Capital One (Europe) plc

Decision detail

Summary

Mr M complained that Capital One refused to refund £440 he lost to a cryptocurrency scam after being tricked into authorising the payment. While Capital One refunded a second fraudulent payment of £250, it declined to refund the initial £440 payment. The ombudsman found the payment was authorised by Mr M, making him liable for the loss. Although Capital One should monitor for fraud risks, the payment appeared ordinary and did not warrant intervention. A chargeback claim would have been unlikely to succeed as there was no evidence the merchant was linked to the scam. The complaint was not upheld.

The Ombudsman's reasoning

The payment was authorised by Mr M, meaning he is generally liable for the loss rather than Capital One. Although the funds were lost due to a scam, the payment did not appear unusual enough to warrant Capital One's intervention. A chargeback claim would have been unlikely to succeed because there was no evidence the merchant paid was linked to the scam or failed to provide goods/services. Section 75 claims would require Mr M to establish a valid contractual relationship with the merchant and prove breach or misrepresentation, which was unclear.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website