Not upheld: failure to prevent investment scam fraud complaint against Santander UK Plc

Decision detail

Summary

Mr S lost £2,000 to an investment scam with Company C after making two payments from his Santander account in 2016 and 2017. He discovered the fraud in 2023 and complained to Santander in 2026, claiming the bank should have intervened to prevent the payments and protect him from the scam. The ombudsman rejected the complaint, finding that the payments were not unusual enough to warrant intervention and that even if Santander had intervened, it could not have uncovered the fraud because Company C appeared to be legitimately regulated on the FCA register at the time, due to FCA errors. The ombudsman noted that Santander had already paid £50 compensation for a complaint processing error and was not liable for the investment loss.

The Ombudsman's reasoning

The ombudsman applied a risk-based approach to intervention, considering that banks must balance fraud protection with avoiding unnecessary delays to legitimate transactions. The £1,000 payments were not unusually high in the context of Mr S's account activity, which showed frequent payments exceeding this amount. The payments were isolated with a six-month gap, showing no obvious fraud pattern. Even if Santander had intervened, a fraud agent would have confirmed the company's Companies House registration and FCA approval, which Mr S had verified and which appeared legitimate due to FCA register errors. The FCA's failures, not Santander's, enabled the fraud to proceed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website