Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr M complained that HSBC should refund losses from an investment scam perpetrated by company 'T'. Between August and September 2024, Mr M sent funds from HSBC to another bank and a crypto exchange, ultimately transferring them to the scammers. HSBC displayed general scam warnings but Mr M proceeded with payments. The ombudsman found that while HSBC should have issued a specific crypto investment scam warning on a later payment, this would not have prevented Mr M from proceeding given his strong conviction in the investment's legitimacy based on his own research, ability to make withdrawals, and despite warnings from others. The complaint was not upheld as HSBC could not be held responsible for the loss.

The Ombudsman's reasoning

The ombudsman applied the legal starting position that banks must process authorised payments, with Mr M presumed liable. However, banks may take additional steps to protect customers from fraud where appropriate. While HSBC should have provided a specific crypto investment scam warning when Mr M made the second payment to the crypto exchange, the crucial question was causation - whether such intervention would have prevented the loss. The ombudsman found that Mr M was heavily convinced of the investment's legitimacy based on his own due diligence, the ability to make withdrawals, warnings from others that he ignored, and his taking out loans to fund it. Therefore, a crypto scam warning would not have made a difference. HSBC could not have recovered funds as they had already been forwarded to T.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website