Upheld: scam / fraud - inadequate intervention and failure to prevent authorised payment complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr and Mrs P fell victim to a scam involving a cloned investment company and lost £40,000 through an overseas transfer authorised by Mr P. HSBC intervened during the payment process and warned Mr P about similar scams, but the ombudsman found this intervention inadequate. An FCA warning about the cloned company existed at the time but HSBC did not direct Mr P to it or sufficiently emphasise the need to verify using independent contact details. The ombudsman upheld the complaint, finding HSBC responsible for the loss and ordering a refund of £40,000 plus 8% simple interest, as proper intervention would likely have prevented the scam.

The Ombudsman's reasoning

Although Mr P authorised the payment, HSBC had a duty to protect against fraud and should have intervened more effectively. HSBC did intervene but the intervention was insufficient. Given the significant value of the overseas payment, HSBC should have been aware of the FCA warning about the cloned X and directed Mr P to it, or at minimum emphasised the importance of contacting X using details other than those previously used. Had HSBC intervened appropriately, the scam would likely have been uncovered. Mr and Mrs P did not contribute to the loss as X appeared legitimate and they lacked the experience with scams that HSBC possesses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website