Not upheld: scam/fraud - refund claim for authorised payments complaint against Northern Bank Limited, trading as Danske Bank

Decision detail

Summary

Mr P lost money when he fell victim to a scam involving fraudulent flight ticket purchases made via his credit card. Danske Bank's fraud system triggered and they contacted Mr P about the first payment; after he explained it was for flight tickets, they removed the block and allowed the payment. Mr P complained that Danske Bank should have prevented the payments and should refund his losses. The ombudsman found that Danske Bank's intervention was proportionate, the supplier fulfilled their contractual obligations by issuing valid tickets, and Section 75 Consumer Credit Act protections did not apply because the misrepresentation was made by a third-party fraudster rather than the supplier. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

While Danske Bank should take proactive steps to prevent suspicious transactions, there must be a balance between fraud prevention and minimising disruption to legitimate payments. The payment amounts were not unusually high for the customer's history. Danske Bank's intervention (contacting Mr P and discussing the payment) was proportionate and exceeded what would normally be expected. The supplier fulfilled their contractual obligations by issuing valid tickets as requested. Section 75 does not apply because the misrepresentation was made by a third-party fraudster, not the supplier or their authorised agent. Danske Bank could not have prevented the scam through further questioning as the payment was genuinely for flight tickets. Recovery attempts were appropriate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website