Upheld: failure to intervene in scam payment; inadequate fraud prevention measures complaint against Metro Bank PLC

Decision detail

Summary

Mr B, a sole trader, lost £8,000.00 to a vehicle purchase scam after making an international payment to the Netherlands. He believed the funds were protected until he inspected the car, but the seller was fraudulent. Metro Bank PLC refused to refund the payment, citing that the Contingent Reimbursement Model does not apply to overseas payments. The ombudsman upheld the complaint, finding that Metro should have intervened on the significant, atypical international payment by asking probing questions. Had Metro done so, multiple red flags would have been apparent, and Mr B would likely have avoided the loss. The ombudsman ordered Metro to refund the £8,000.00 plus 8% simple interest per year, finding no contributory negligence given the sophisticated nature of the scam.

The Ombudsman's reasoning

Although Mr B authorised the payment and is presumed liable in the first instance, Metro Bank had a responsibility under regulatory expectations and good industry practice to intervene. The payment was significant, international, and atypical for the account holder. Metro should have contacted Mr B with probing questions about the payment. Had it done so, the red flags would have been apparent: an unseen vehicle, offshore seller with time pressure, payment outside the claimed protection platform, and mismatched email domain. The ombudsman concluded that such intervention would likely have prevented the loss, and therefore Metro's failure to intervene caused the loss. The scam was sophisticated and Mr B was reasonably reassured by the belief his money was protected, so no contributory negligence reduction was applied.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website