Not upheld: scam loss refund liability complaint against Santander UK Plc

Decision detail

Summary

Ms W fell victim to a scam where a hacker using her friend's email address requested help purchasing gift cards. Ms W made two payments totalling £500 to a well-known online merchant and sent the gift cards to the scammer. She reported the scam to Santander and requested a refund, which Santander declined. The ombudsman found that Ms W authorised the payments herself, making her liable under the Payment Services Regulations, and that the payments were not sufficiently unusual to warrant Santander's intervention. No chargeback was available as the merchant had provided what they were supposed to. The complaint was not upheld.

The Ombudsman's reasoning

Although Ms W authorised the payments and did not intend for the money to reach a scammer, under the Payment Services Regulations she is liable for her own authorised payments in the first instance. Santander had an obligation to follow her instructions. While Santander should monitor for potentially fraudulent payments, a balance must be struck with legitimate payment processing. The two modest payments to a well-known merchant Ms W had used before, made from a sufficient balance in an unexceptional timeframe, were not sufficiently unusual or concerning to require intervention. No chargeback was available as the merchant performed their obligations correctly. Therefore, Santander cannot fairly be held responsible for the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website