Upheld: scam/fraud - failure to protect customer from investment scam complaint against Wise Payments Limited

Decision detail

Summary

Mr M lost £399,657.48 to a sophisticated investment scam where fraudsters impersonated a genuine US investment bank director. He made three payments between July and September 2025 before discovering the scam himself. Wise Payments Limited refunded £85,000 under the statutory Reimbursement Rules but refused to refund the remaining £314,657.48. The ombudsman upheld the complaint, finding that Wise should have identified heightened fraud risk from the first payment (£70,000 funded by immediate credit, depleting full balance) and conducted human intervention with probing questions. The ombudsman concluded that if Wise had suggested Mr M verify the director's legitimacy using independent contact details, the scam would have been uncovered, as Mr M ultimately discovered it through similar verification. Wise was ordered to refund the remaining £314,657.48 plus 8% simple interest.

The Ombudsman's reasoning

The ombudsman found that while Wise correctly applied the Reimbursement Rules by refunding £85,000, it should have done more to protect Mr M under general regulatory requirements and good industry practice. The first payment of £70,000 presented clear warning signs (significant amount, funded by immediate credit, depleting full balance) that should have triggered human intervention with probing questions. The ombudsman concluded that if Wise had asked about how Mr M found the investment, his communication method, and expected returns, Mr M would have answered honestly. Wise should then have suggested Mr M verify the director's legitimacy using independent contact details and questioned why payment was going to a third party. The ombudsman found it likely Mr M would have acted on these suggestions, as he ultimately uncovered the scam himself through similar verification. Therefore, Wise bears responsibility for the full loss from the first payment onward. The ombudsman found Mr M did not act unreasonably, as the scam was sophisticated with professional-looking documents and cloned email addresses, and Mr M had attempted reasonable verification checks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website