Upheld: scam - failure to prevent fraudulent transactions despite clear warning signs complaint against ClearBank Limited
Financial Ombudsman decision DRN-6278086 of 2026-05-12T00:00:00+00:00. scam - failure to prevent fraudulent transactions despite clear warning signs complaint against ClearBank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6278086 |
|---|---|
| Decision date | 2026-05-12T00:00:00+00:00 |
| Firm | ClearBank Limited |
| Product | current account |
| Claim type | scam - failure to prevent fraudulent transactions despite clear warning signs |
| Outcome | Upheld |
| Remedy | ClearBank Limited must refund the two scam payments in full (approximately £9,800) and add simple interest calculated using a time-weighted average of the Bank of England base rate plus 1 percentage point, payable from the date each payment debited until the date of refund. Payment must be made within 28 days of acceptance of the decision. |
Summary
S, a limited company represented by its director Miss C, was victim to a sophisticated scam where a scammer impersonated ClearBank through spoofed emails, texts, and phone calls to convince Miss C to authorise two card payments totalling approximately £9,800, which were then sent to the scammer. ClearBank accepted S had been scammed but offered only 50% refund. The ombudsman upheld the complaint, finding that ClearBank should have intervened when the spending showed clear signs of fraudulent activity - it was large, rapid, out of character, and drained the account. Miss C was not sufficiently negligent as she was subjected to a sophisticated scam and was attempting to protect the account by following what she believed were the bank's instructions. ClearBank was directed to refund the full loss plus simple interest.
The Ombudsman's reasoning
ClearBank had a duty to monitor accounts and payments to counter fraud risks and should have intervened when the spending showed clear signs of fraudulent activity - it was large, rapid, out of character, and drained the account. Had ClearBank intervened with reasonable questions, they likely would have uncovered the scam. Although Miss C authorised the payments, this does not mean the bank has no liability for authorised transactions in all situations; banks may be liable for failure to prevent foreseeable harm. Miss C was not sufficiently negligent as she was subjected to a sophisticated scam where the scammer impersonated the genuine bank in detail, and she was trying to protect the account by following what she believed were the bank's instructions. Therefore, ClearBank bears full liability for the loss.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| ClearBank Limited, all decisions | 172 | 46% |
Source
Read the original decision on the Financial Ombudsman Service website