Not upheld: scam / fraud - failure to prevent and recover funds complaint against Wise Payments Limited

Decision detail

Summary

Mr C lost approximately £14,000 after being scammed by a fraudulent investment firm. He sent funds via Wise to a crypto exchange, which were then transferred to the scammer. Mr C requested Wise refund the payments, arguing Wise should have done more to prevent the scam. Wise intervened with an automated warning when Mr C attempted a £6,600 payment, but because Mr C answered 'none of the above' to how he found the investment, he did not receive a crypto scam warning. The ombudsman found that Wise intervened appropriately and that Mr C's answers prevented delivery of a relevant warning. Additionally, no chargeback was possible as Mr C received the cryptocurrency he paid for, and recovery from the crypto exchange was impossible as funds had already been transferred to the scammer.

The Ombudsman's reasoning

Wise is expected to monitor accounts, detect unusual transactions, and intervene to prevent scams. However, the ombudsman found that Wise intervened at the appropriate point (the £6,600 payment) and that the warning system was triggered correctly. The critical issue was that Mr C's answer of 'none of the above' to how he found the investment prevented the system from providing a relevant crypto scam warning. The ombudsman concluded that Wise could not have stopped the scam with a proportional intervention given Mr C's responses. Additionally, no chargeback was possible because Mr C received the cryptocurrency he paid for; the loss occurred only when he transferred it to the scammer. Recovery from the crypto exchange was impossible as the funds had already been sent to B.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website