Not upheld: investment scam - refund claim under CRM Code and Payment Services Regulations complaint against Coutts & Company

Decision detail

Summary

Mrs B and Mr S lost £105,000 to an investment scam involving Company P between November 2021 and 2023. They sought refunds from Coutts & Company, their bank, claiming the bank should have prevented the payments or reimbursed them under the CRM Code. The ombudsman found the payments met the CRM Code definition of an APP scam but Coutts was not a signatory to the voluntary code. While Coutts should have intervened on the large third payment of £85,000, at the time of payment there was no publicly available information that Company P was fraudulent, and the complainants had completed legitimate due diligence. Therefore, the ombudsman did not uphold the complaint and did not require Coutts to provide a refund.

The Ombudsman's reasoning

Although the payments meet the CRM Code definition of an APP scam, Coutts was not a signatory to the voluntary CRM Code and made no public commitments to provide refunds under it. The ombudsman could not fairly require Coutts to reimburse under CRM Code terms. Regarding Payment Services Regulations, while Coutts should have intervened on the large third payment of £85,000, at the time of payment there was no publicly available information that Company P was fraudulent. The complainants had completed due diligence and appeared to be legitimate investors, so any intervention call would unlikely have resulted in the bank blocking the payment. Therefore, Coutts did not breach its regulatory obligations or cause the financial loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website