Partially upheld: unauthorised transactions and customer service complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr C complained that HSBC unfairly declined to refund four faster payment transfers totalling £2,800 made after his wallet was stolen, and that HSBC provided poor customer service. HSBC refunded card payments but declined the faster payment transfers because they were made using mobile banking accessed via Face ID on the same device as genuine transactions. The ombudsman found that the transactions were properly authenticated and that Mr C likely consented to them, as a third party would have needed either his security credentials or device access, neither of which was plausible given the circumstances. However, the ombudsman found that HSBC agents provided contradictory and misleading information during customer service interactions, and ordered £100 compensation for this service failure.

The Ombudsman's reasoning

The ombudsman distinguished between authentication (the procedure to verify the person making the payment) and authorisation (consent to the payment). While the transactions were properly authenticated using Face ID on a registered device, the key question was whether Mr C consented to them. Given that Face ID is biometric and unique to an individual, that the device had been registered since January 2025 with no prior fraudulent activity, that Mr C's credentials were not shared, and that Mr C had the device with him throughout, it was not plausible that a third party could have completed the transactions without Mr C's knowledge. The burden of proof test is not whether the exact perpetrator can be identified, but what is most likely to have happened on the balance of probabilities. Regarding customer service, while HSBC's decision to freeze online banking was fair and postal letters were sent, HSBC agents did provide contradictory and misleading information causing frustration, warranting compensation of £100.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website