Not upheld: Authorised Push Payment (APP) scam - reimbursement claim complaint against J.P. Morgan Europe Limited (trading as Chase)

Decision detail

Summary

Mrs K lost a substantial sum to an investment scam after being convinced by scammers to make payments through intermediary currency transfer entities C and R. She had been warned twice by another bank (S) that she was being scammed but continued regardless, and misled Chase when it intervened. Chase refunded 50% of payments to R but declined further reimbursement. The ombudsman upheld Chase's decision, finding that the Reimbursement Rules do not apply to payments made to PSP-held pooled accounts, and that further intervention by Chase would unlikely have prevented Mrs K's loss given her determination to continue despite clear warnings and her willingness to deceive the bank.

The Ombudsman's reasoning

The Reimbursement Rules do not apply because payments were made to pooled client accounts held by PSPs (C and R), not to 'relevant accounts' as defined by the rules. Relevant accounts must be held by PSP customers, not PSPs themselves, and must be UK-based. Chase's terms and conditions do not cover payments to intermediary accounts. While Chase could have intervened earlier, such intervention would unlikely have prevented Mrs K's loss because she had already been warned twice by S that she was being scammed, yet chose to continue and actively misled Chase about the purpose of payments. Mrs K's vulnerability, while acknowledged, does not entitle her to a refund outside the Reimbursement Rules framework, and Chase had no clear indication of vulnerability during the intervention call. Recovery of funds was not possible as they had already been transferred overseas before the scam was reported.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website