Not upheld: Fraud reimbursement (APP scams) complaint against Lloyds Bank PLC

Decision detail

Summary

Dr M lost £5,000 to an investment scam after authorising a payment from her Lloyds account to a cryptocurrency exchange. She complained that Lloyds should have done more to prevent the scam by asking more probing questions and providing a more tailored cryptocurrency warning. Lloyds had identified the payment as high-risk, contacted Dr M before processing it, and provided a detailed cryptocurrency investment warning during the call. The ombudsman found that although Lloyds could have asked more probing questions, this would not have changed Dr M's decision because she was relying on recommendations from a family member who had already invested in the scheme. The complaint was not upheld, with the ombudsman finding that Lloyds could not have reasonably identified the scam at the time and that the fault lay with the scammers, not Lloyds.

The Ombudsman's reasoning

The ombudsman acknowledged that Lloyds could have asked more probing questions but concluded this would not have made a difference. The key reasoning was that Dr M was relying on reassurances from a family member who had direct experience with the investment and was apparently seeing promised returns. Even if Lloyds had highlighted the high returns as concerning, the family member would have been able to reassure Dr M. Dr M had already been provided with a detailed cryptocurrency warning, informed of the high risk, and told she could lose all her money, yet she chose to proceed. The ombudsman found it was only with hindsight that the scam was identifiable, and Lloyds could not have reasonably prevented the loss at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website