Not upheld: scam protection, chargeback handling, irresponsible lending/gambling protection complaint against Lloyds Bank PLC

Decision detail

Summary

Miss S complained that Lloyds failed to protect her from financial harm when she made payments to an unlicenced gambling company between October and November 2024, and that Lloyds should have raised chargebacks to recover her losses. Lloyds discovered Miss S was gambling on 2 November and offered support and signposting, but Miss S continued gambling despite this intervention. The ombudsman found that Lloyds took appropriate protective action, that the chargeback request was raised outside the mandatory 120-day time limit, and that there was insufficient evidence to support a 'Services Not Received' chargeback. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman found that although Miss S authorised the payments, banks should look for unusual transactions to protect customers from scams. However, the ombudsman did not definitively establish this was a scam, noting that unregulated gambling sites and non-standard MCC codes do not automatically indicate fraud. Lloyds intervened appropriately when it discovered gambling activity on 2 November, offering support and signposting, but Miss S chose to continue gambling regardless. The ombudsman found Lloyds was not required to raise chargebacks because: (1) the initial chargeback request was raised more than 120 days after the payments, exceeding the mandatory time limit; (2) for the 'Services Not Received' chargeback, there was insufficient evidence that Miss S was entitled to winnings that were not paid out. The ombudsman concluded Lloyds could not have done more to protect Miss S and was not obligated to refund the payments from its own account.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website