Upheld: irresponsible fraud prevention - failure to adequately protect customer from APP scam complaint against TSB Bank plc

Decision detail

Summary

Mr G was victim of a sophisticated email intercept scam where fraudsters impersonated his solicitors and changed bank details for his divorce settlement payment, causing him to transfer £204,784.49. TSB refunded £144,892.25 under the Reimbursement Rules but refused the remaining £59,892.24. The ombudsman found TSB should have done more to protect Mr G by adequately explaining the scam type and requiring verification steps, particularly after discovering the payee company was dissolved and unrelated to the payment purpose. The ombudsman upheld the complaint and required TSB to refund the remaining loss plus interest, finding that proper intervention would have uncovered the scam and Mr G acted reasonably given the sophistication of the fraud.

The Ombudsman's reasoning

While TSB complied with the Reimbursement Rules by refunding £144,892.25, the ombudsman found TSB should have done more to protect Mr G outside these rules. TSB identified the heightened fraud risk but failed to adequately explain the specific type of scam (email intercept/impersonation) to Mr G or require sufficient verification steps. The discovery that the company was dissolved and unrelated to the payment purpose should have triggered further investigation. If TSB had properly explained the scam type or required Mr G to verify the bank details by phone call or email correspondence review, the scam would have been uncovered. Mr G acted reasonably given the sophistication of the scam and should not bear responsibility for the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website