Not upheld: scam protection and fraud prevention complaint against Lloyds Bank PLC

Decision detail

Summary

Mr K paid a £16,155.09 deposit for refurbished trucks from a China-based company that were never delivered due to a shipping cost dispute. He complained to Lloyds claiming he was the victim of a scam and sought a refund. The ombudsman found the payment was not covered by the CRM Code as it was international and concluded there was insufficient evidence of a scam, as the supplier had legitimate credentials (Companies House registration, active website) and the dispute appeared contractual rather than fraudulent. Even assuming a scam had occurred, the ombudsman found Lloyds could not have prevented the payment, as there was nothing about it that would have indicated risk at the time. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a two-part test: first, whether Mr K was the victim of a scam, and second, whether Lloyds could have prevented it. On the first point, the ombudsman found insufficient evidence of a scam, noting the business had legitimate credentials (Companies House registration, active website) and the dispute appeared to be about shipping costs rather than outright deception. On the second point, even assuming a scam had occurred, the ombudsman concluded Lloyds could not have prevented the payment because there was nothing about it that would have indicated risk at the time, and Mr K would have answered any verification questions honestly about a seemingly legitimate business.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website