Not upheld: scam - failure to prevent unauthorised payments complaint against Lloyds Bank PLC

Decision detail

Summary

Mr T complained to Lloyds Bank PLC after losing over £6,000 to an investment scam in June 2025, requesting reimbursement of the payments he made to the scammer. The Investigator did not uphold the complaint, finding that the payments were not of a value or frequency that should have concerned Lloyds. The ombudsman upheld this decision, reasoning that while Mr T was a victim of a scam, customers are presumed liable for authorised payments under the Payment Services Regulations 2017, and the specific transactions did not have sufficient hallmarks to suggest fraud. The ombudsman also noted that recovery options such as chargeback were unlikely to succeed and that the Contingent Reimbursement Model Code did not cover these types of transactions.

The Ombudsman's reasoning

Although Mr T was a victim of a scam, being scammed does not automatically entitle a customer to reimbursement. The ombudsman applied the principle that customers are presumed liable for authorised payments under PSRs 2017. The key question was whether Lloyds should have intervened based on the characteristics of the transactions. The ombudsman agreed with the Investigator that the payments were not of sufficient value or frequency to trigger concern, and there were no clear hallmarks suggesting fraud. While Mr T was vulnerable, no pattern emerged that would have alerted Lloyds to this vulnerability in isolation. The ombudsman also noted that recovery options (chargeback and remittance service recovery) were unlikely to succeed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website