Not upheld: authorised push payment (APP) scam - reimbursement claim under CRM Code complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs M fell victim to an employment/visa sponsorship scam after contacting an individual 'F' via social media who promised job search assistance. She made three payments totalling £2,500 between May and August 2024 before realising the scam. Mrs M claimed reimbursement from Lloyds under the CRM Code, but Lloyds declined, citing the exception that she lacked a reasonable basis for believing the payments were genuine. The ombudsman upheld Lloyds' decision, finding that Mrs M should have exercised greater caution given multiple red flags including the social media contact, lack of formal documentation, payment to a personal account, and absence of company verification. The ombudsman concluded Lloyds was not required to provide an effective warning as the payments appeared normal at the time, and no funds remained for recovery as the scam was reported months after the payments were made.

The Ombudsman's reasoning

The ombudsman found that Mrs M did not have a reasonable basis for believing the payments were for genuine goods or services or that the person was legitimate. Key red flags included: F was contacted via social media with no prior recommendation, no formal company affiliation, no formal documentation provided, payment made to a personal account, and no verification checks performed. Given the seriousness of visa implications and availability of information on GOV.UK, Mrs M should have exercised greater caution and conducted additional checks. The ombudsman concluded Lloyds could fairly rely on the CRM Code exception and was not required to provide an effective warning as the payments did not appear suspicious or out of character at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website