Not upheld: unauthorised transactions dispute complaint against Lloyds Bank PLC

Decision detail

Summary

Ms M claimed that after her purse and phone were stolen outside a supermarket on 8 March 2025, an unknown group of thieves used her card to make unauthorised transactions between 8 and 14 March 2025. She alleged the thieves had observed her entering her PIN and phone passcode. Lloyds refused to refund the transactions, noting they were completed using multiple authentication methods and that online banking had been accessed multiple times. The ombudsman found Ms M's account implausible, noting the absence of declined PIN transactions, the implausibility of thieves obtaining her online banking credentials through shoulder surfing, and the unusual pattern of gradual spending rather than maximum cash extraction. The ombudsman concluded the evidence did not support unauthorised third-party use and upheld Lloyds' refusal to refund, finding the £20 compensation already offered appropriate.

The Ombudsman's reasoning

The ombudsman found Ms M's account of how the thieves obtained her security details implausible. The absence of declined chip & PIN transactions contradicted her claim of entering her PIN into terminals. The ombudsman reasoned that the thieves could not have obtained her online banking credentials through shoulder surfing alone, as the banking app required both username and password entry. The unusual delay in reporting the theft to Lloyds (6 days), failure to block ApplePay or her phone, and the pattern of spending (gradual withdrawals below daily limits rather than maximum cash extraction) all suggested the account holder was aware of and authorising the transactions. The ombudsman concluded the evidence did not support that an unauthorised third party made these transactions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website