Not upheld: scam/fraud - failure to prevent unauthorised payments to scammers complaint against Bank of Scotland plc (trading as Halifax)

Decision detail

Summary

Mr B complained to Halifax and subsequently the FOS about losses totalling approximately £347,000 from a gold/currency trading scam (Scam 5) occurring between September 2022 and November 2023. Mr B claimed Halifax should have prevented the payments or intervened more effectively. Halifax did not uphold the complaint, and the investigator agreed. The ombudsman found that while Halifax had visibility of the transactions and intervened on multiple occasions with robust warnings, Mr B would have frustrated any further intervention due to his trust in the scammer 'Bella', apparent profits on the platform, and his pattern of prioritising scammers' assurances over Halifax's warnings. The ombudsman concluded that Halifax's interventions were proportionate and that even full invocation of the Banking Protocol would not have prevented the losses, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Halifax's fraud detection systems would not reasonably have been triggered by Scam 5 payments given the established pattern of large payments to Payward. Even if the payments had flagged, the ombudsman concluded that Mr B would have frustrated any intervention by Halifax. This conclusion was based on: (1) Halifax's previous proportionate interventions which Mr B ignored; (2) Mr B's expressed frustration with Halifax's attempts to prevent transactions; (3) the personal and romantic nature of Mr B's relationship with the scammer 'Bella'; (4) the apparent profits and returns Mr B saw on the platform; (5) Mr B's pattern of trusting third parties over Halifax's warnings across multiple scams; and (6) Mr B's history of raising complaints when Halifax prevented transactions. The ombudsman also found that even if the Banking Protocol had been fully invoked with police involvement, this would not have prevented Mr B's losses. Regarding recovery, the ombudsman found that funds transferred to Mr B's own account or converted to cryptocurrency could not be recovered, and the delay between payments and fraud report meant minimal recovery chances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website