Not upheld: failure to prevent fraud/scam complaint against Clydesdale Bank Plc trading as Yorkshire Bank

Decision detail

Summary

Mr M complained that Clydesdale Bank failed to prevent him losing £18,194 to a purchase scam involving gold bars. Mr M sent the payment in February 2020 believing it was for a legitimate purchase arranged outside an online auction platform. A recall request was made on 27 February 2020, but Clydesdale's customer (the account holder) claimed entitlement to the funds. The ombudsman found that Clydesdale was not put on notice of a scam allegation, the account activity was unremarkable, and the bank acted reasonably in checking with their customer before responding to the recall request. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied a proportionality test, recognizing that banks must balance fraud prevention with allowing customers ready access to their accounts. The account activity prior to the payment was unremarkable and within normal expectations. The payment itself and subsequent outgoing payments were not meaningfully distinct from typical account operation. The recall request message did not indicate a scam allegation, and Clydesdale reasonably checked with their customer before acting. Industry practice requires scam allegations to be made through the sending bank, not directly to the receiving bank. Even if Clydesdale had engaged more with Mr M, the account holder would likely have contested any claim to the funds.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website