Not upheld: scam - failure to prevent fraudulent payments complaint against Starling Bank Limited

Decision detail

Summary

Mrs R complained that Starling Bank Limited should refund approximately £27,000 she lost to two scams (an investment scam and a job scam) in May 2025. She argued that Starling should have done more to protect her through additional interventions. Starling provided a new payee warning and questions on the first payment but did not intervene on subsequent payments. The ombudsman found that while Starling made proportionate interventions, the complaint failed on causation: evidence from scam chats showed that Mrs R had been coached by the scammers on how to answer banking questions, deliberately kept payments secret from her husband, and used multiple accounts on the scammer's advice to circumvent banking controls. The ombudsman concluded that no further intervention from Starling would have prevented the loss given Mrs R's strong relationship with the scammers and her active cooperation in circumventing banking protections. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which establish that consumers are generally liable for authorised payments, but banks have obligations to protect customers from fraud. While Starling made proportionate interventions (new payee warning and questions on the first payment), the critical issue was causation: whether further interventions would have prevented the loss. The ombudsman found that Mrs R had built a strong relationship with the scammers and was actively coached on how to overcome banking interventions. She deliberately kept payments small and secret from her husband, used multiple accounts on the scammer's advice, and shared screenshots with the scammer to help answer banking questions. The scammer specifically advised her to use different banking providers to avoid detection. Given this level of deception and Mrs R's willingness to circumvent controls, the ombudsman concluded that no further proportionate intervention from Starling would have broken the scammer's influence or uncovered the fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website