Partially upheld: irresponsible failure to prevent fraud - investment scam complaint against Kroo Bank Ltd
Financial Ombudsman decision DRN-6249054 of 2026-04-22T00:00:00+00:00. irresponsible failure to prevent fraud - investment scam complaint against Kroo Bank Ltd. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6249054 |
|---|---|
| Decision date | 2026-04-22T00:00:00+00:00 |
| Firm | Kroo Bank Ltd |
| Product | current account |
| Claim type | irresponsible failure to prevent fraud - investment scam |
| Outcome | Partially upheld |
| Remedy | Kroo Bank Ltd must pay Ms C compensation calculated as follows: 48.82% refund of each of payments 2-5 (representing 50% refund of the proportion lost to scam), plus simple interest at 8% per annum from the date of each payment to the date of compensation. The calculation accounts for the £476.30 returned to Ms C by apportioning it proportionately across all payments made to the scam. |
Summary
Ms C was defrauded through a fake cryptocurrency investment scheme after responding to a celebrity-endorsed online advert. She made five transfers totalling £19,680 from her Kroo account to a cryptocurrency account in her own name between 27-28 January 2025, losing £19,703.70 after deducting £476.30 in false returns. Kroo failed to intervene before payment 2 despite it being inconsistent with the account's stated purpose and presenting elevated fraud risk. The ombudsman upheld the complaint in part, finding Kroo should have conducted human intervention with tailored warnings about investment scams, which would have prevented payments 2-5. Ms C is awarded 48.82% refund of payments 2-5 plus interest, reflecting a 50% deduction for her own failure to exercise reasonable caution regarding unrealistic returns and lack of due diligence.
The Ombudsman's reasoning
While Ms C authorised the payments, Kroo had a fair and reasonable obligation to monitor accounts for fraud risks and intervene where appropriate. Payment 1 (£10) was too small to warrant concern, but payment 2 (£5,000) to cryptocurrency was inconsistent with the stated purpose of day-to-day spending and should have triggered intervention. A human intervention with tailored warnings about investment scams would likely have prevented payments 2-5. Ms C bears 50% responsibility because she should have questioned the extremely high returns and the sudden requirement for fees, and should have conducted further research. The other bank's successful intervention two days later demonstrates that a robust warning would have been effective.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Kroo Bank Ltd, all decisions | 139 | 51% |
Source
Read the original decision on the Financial Ombudsman Service website