Partially upheld: scam - Authorised Push Payment (APP) fraud and recovery scam; failure to intervene complaint against Lloyds Bank PLC

Decision detail

Summary

Mr D complained that Lloyds Bank PLC refused to refund money he lost after falling victim to an investment scam and subsequent recovery scam. Between March and May 2025, Mr D sent over £28,000 from his Lloyds account to an EMI account (R) which was used to fund the scam. After reporting the initial scam on 11 April 2025 and receiving scam education, Mr D fell victim to a recovery scam and made a final £10,000 payment on 24 May 2025. The ombudsman upheld the complaint in part, finding that Lloyds should have intervened with a phone call given their knowledge that all payments to R were part of a scam, and that such intervention would have prevented the final loss. However, a 50% reduction was applied for Mr D's contributory negligence, resulting in an order for Lloyds to refund £5,000 plus 8% simple interest.

The Ombudsman's reasoning

Although Mr D received scam education and the R account was in his own name and marked as trusted, Lloyds had specific knowledge from the 11 April 2025 call that all payments to R were part of a scam and that Mr D had been instructed to open the account by the scammer. When Mr D resumed making high-value payments to R as part of a recovery scam, this should have triggered a phone call intervention given the prior knowledge and context. The ombudsman was satisfied that a phone call would have uncovered the recovery scam and prevented further loss. However, Mr D bore contributory responsibility for ignoring clear red flags and continuing to send funds even after reporting the initial scam, justifying a 50% reduction.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website