Not upheld: unauthorized lending / fraud claim complaint against North Edinburgh and Castle Credit Union Limited trading as Castle Community Bank (CCB)

Decision detail

Summary

Mr B complained that CCB pursued him for a £10,000 loan taken out in his name without his knowledge by a scammer. The loan was approved in July 2024 after standard checks and paid into Mr B's bank account. Mr B subsequently made numerous attempts to transfer the funds to a scam and told his bank the loan was from community finance. The ombudsman found that Mr B's actions demonstrated he had knowledge of and accepted liability for the loan, rejecting his claim of unauthorized lending. The complaint was not upheld, and the ombudsman found CCB had not treated Mr B unfairly by holding him liable for repayment.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test given incomplete and contradictory evidence. The key finding was that Mr B's subsequent actions—making multiple attempts to transfer the funds and telling his bank the loan was from community finance—demonstrated he had knowledge of and accepted liability for the loan. The fact that Mr B does not drive does not prove he did not apply for the loan. The ombudsman concluded Mr B followed scammers' instructions on what to tell his bank, but this does not negate his initial consent to the loan application.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website