Not upheld: scam prevention and fraud protection complaint against Bank of Scotland plc

Decision detail

Summary

Mr C fell victim to a cryptocurrency investment scam after being contacted on social media by a fraudster posing as an investment advisor. Over approximately 11 months from December 2020 to December 2021, Mr C made 49 payments totalling around £54,000 to cryptocurrency exchanges and payment processors, believing he was making legitimate investments. When he attempted to withdraw funds, the scammer's website was taken down. Mr C complained to Bank of Scotland seeking a refund, arguing the bank should have prevented the payments. The ombudsman found that while BoS should have intervened earlier with warnings on larger payments, the bank's actual interventions through written warnings and phone calls were proportionate and reasonable. Since Mr C authorised all payments and was not dissuaded by the warnings provided, the ombudsman concluded BoS was not responsible for the loss and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman acknowledged that while banks have a duty to protect against fraud and conduct due diligence on large transactions, Mr C authorised all payments and gave the impression of being an experienced investor. Although BoS should have intervened with a written warning on the £5,000 payment on 1 June 2021, the bank did provide general warnings and made multiple interventions through calls. The interventions undertaken were proportionate and in line with expectations. Crucially, the general warnings did not dissuade Mr C from continuing, and the ombudsman found no evidence that further intervention would have prevented the scam. Therefore, BoS was not responsible for the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website