Not upheld: irresponsible lending / failure to intervene in authorised push payment fraud complaint against Santander UK Plc

Decision detail

Summary

Mr B lost approximately £40,945 to an investment scam after making four authorised payments from his Santander account to accounts in his own name with other financial institutions, from which the money was subsequently transferred to scammers. He complained that Santander should have intervened to prevent the payments, particularly payment 2 (£19,950), and that the bank failed to meet its Consumer Duty obligations. The ombudsman found that while Santander should have attempted to contact Mr B about payment 2, the bank was not liable for the losses because Mr B was deliberately coached by scammers not to disclose the true purpose of payments, and there is insufficient evidence that intervention would have prevented him from proceeding given his apparent unwillingness to be truthful and the scammers' influence over him. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

While Santander should have intervened on payment 2 by attempting to contact Mr B to understand the circumstances, the bank is not liable for the losses because: (1) Mr B was deliberately coached by scammers not to disclose the true purpose of payments; (2) when Santander did speak to him about payment 4, he provided a plausible explanation and denied being asked to lie, which was reasonable to accept; (3) there is insufficient evidence that earlier intervention would have stopped Mr B from proceeding, particularly given his apparent unwillingness to be truthful and the scammers' influence; (4) written warnings from the EMI about investment scams did not deter Mr B, suggesting bank warnings would likely have been equally ineffective; (5) the harm was not caused by Santander's actions but by Mr B's decision to proceed with payments he had authorised; (6) Mr B is not covered by the APP reimbursement scheme as it does not cover card payments or transfers to accounts in the customer's own name.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website