Not upheld: investment scam protection and failure to prevent financial harm complaint against Northern Bank Limited trading as Danske Bank

Decision detail

Summary

Mr B invested over £480,000 in various start-up companies between 2019 and 2023, believing them to be legitimate based on Companies House registration and realistic websites. He discovered he might be a scam victim in January 2023 and complained to Danske Bank, which refused to refund the payments. The estate of Mr B (who passed away during the complaint process) argued Danske should have done more to protect him. The ombudsman found insufficient evidence to establish a scam had occurred, as no FCA or IOSCO warnings existed and police investigations had not conclusively proven fraud. Although Danske could have intervened more robustly, the ombudsman concluded Mr B remained convinced the investments were legitimate despite warnings and had conducted due diligence, leaving nothing further Danske could reasonably have done. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman concluded that while Danske could have done more before processing later cheques, there was insufficient evidence to establish that Mr B was the victim of a scam meeting the legal threshold of fraud under the Fraud Act 2006. The absence of warnings on FCA and IOSCO websites, combined with the lack of conclusive evidence from police investigations, meant the ombudsman could not determine the companies were operating scams. Although Danske's interventions could have been more robust, the ombudsman found that Mr B remained convinced the investments were legitimate despite warnings and had conducted what he believed was adequate due diligence. Therefore, there was nothing further Danske could reasonably have done to prevent the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website