Not upheld: scam / fraud protection failure and refund claim complaint against PayPal UK Ltd trading as PayPal

Decision detail

Summary

Mr K complained that PayPal unfairly refused to refund £1,522.56 he lost in an alleged investment scam and refused to compensate him for consequential losses including health deterioration and lost job opportunities. Mr K claimed he was contacted via social media by someone called T about an investment, was manipulated into setting up a PayPal account using false information, and made 18 payments between December 2023 and March 2024 before realising he had been scammed. PayPal argued the payments were authorised, relatively small, and not unusual for the account type. The ombudsman did not uphold the complaint, finding insufficient evidence to establish a scam had occurred, as Mr K provided no communications from the alleged scammer, no evidence of misleading claims, and had deleted key evidence. Without establishing a scam, the claims for refund and consequential losses could not succeed.

The Ombudsman's reasoning

The ombudsman found that while the payment pattern (multiple low-value transactions routed through multiple accounts to the same payee, difficulty withdrawing funds) resembled characteristics of investment scams, Mr K failed to provide sufficient supporting evidence of a scam. Critically, Mr K provided no copies of communications from the alleged scammer making misleading claims, promising returns, requesting fees, or otherwise evidencing fraudulent conduct. The ombudsman noted that Mr K deleted these communications and that evidence of a separate unrelated scam attempt did not establish that this particular loss was due to a scam. Without establishing a scam occurred, the claims for PayPal's failure to protect him and consequential losses could not succeed. The ombudsman also found insufficient evidence linking the consequential losses (medical bills, lost job opportunities) to PayPal's actions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website