Not upheld: scam protection and fraud prevention complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr C lost over £9,000 to a sophisticated rental scam while relocating overseas. He paid a holding fee and three rental installments to what he believed was a legitimate property agent, but the agent was impersonating a legitimate business. Mr C conducted due diligence before paying and received official-looking documentation. He complained to HSBC that it should have provided warnings and intervened, particularly given the international nature of the payments and the escalating values. The ombudsman found that while banks should monitor for fraud, the payments were not significantly out-of-line with Mr C's previous account usage on his Global Money account (designed for international transfers), and the payment pattern did not show the increasing frequency typical of fraud. Most importantly, the ombudsman concluded that even if HSBC had intervened, it would not have prevented the loss given the sophisticated nature of the scam and Mr C's prior due diligence.

The Ombudsman's reasoning

The ombudsman acknowledged that banks should be alert to fraud risks and make additional checks in certain circumstances. However, the ombudsman found that the payments were not significantly out-of-line with Mr C's previous account usage on the Global Money account. The payments did not show an increasing frequency pattern (gaps of 2+ weeks between payments), which is a key fraud red flag. Critically, even if HSBC had intervened with a warning, the ombudsman was not satisfied it would have prevented the loss because: (1) Mr C had conducted thorough due diligence before the first payment; (2) Mr C received what appeared to be a formal legal rental agreement before subsequent payments; and (3) the sophisticated nature of the scam meant it was not discovered until 16 July 2025, nearly two weeks after the final payment, when Mr C had no reason to suspect fraud earlier.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website