Partially upheld: scam reimbursement / failure to prevent fraud complaint against Santander UK Plc

Decision detail

Summary

Mrs C (continuing her late husband Mr C's complaint) claimed Santander failed to reimburse funds lost to an investment scam between November and December 2020. Mr C made six payments totalling £21,400 after responding to an email about investment opportunities with company 'N'. Santander had already reimbursed 50% of the first two payments (£4,700) under the CRM Code, but refused to reimburse the four cryptocurrency payments (£12,000). The ombudsman upheld the complaint in part, finding that while Mr C authorised the payments and should bear 50% responsibility for not conducting basic checks, Santander should have provided a strong cryptocurrency warning after stopping a £9,500 payment on an 80-year-old customer's account, which would likely have revealed the scam. Santander was ordered to reimburse 50% of the four cryptocurrency payments (£6,000) plus 8% interest.

The Ombudsman's reasoning

While the starting legal position is that customers are responsible for authorised payments, account providers have a regulatory duty to protect customers from fraud and financial harm through monitoring and intervention. The payments were out of character, particularly the £6,300 payment and the £9,500 payment that triggered Santander's own fraud block. The fact that Santander stopped the £9,500 payment demonstrates it recognised the fraud risk. An 80-year-old customer making substantial cryptocurrency payments immediately after a fraud block, combined with Santander's knowledge of cryptocurrency scams and the FCA warning on company 'N', meant Santander should have provided a strong cryptocurrency warning that would likely have revealed the scam. However, Mr C bears some responsibility for not conducting basic checks on the investment, being instructed to mislead the bank, and responding to an unsolicited email, justifying a 50% reduction.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website