Not upheld: fraud and scam - impersonation scam; failure to intervene on suspicious payment complaint against NewDay Ltd

Decision detail

Summary

Mrs V fell victim to an impersonation scam where a fraudster posing as her company director asked her to purchase £1,600 in gift vouchers, claiming he would reimburse her. She made four £400 payments via her NewDay card on 12 March 2025. NewDay blocked the first payment but released it after Mrs V verified her identity through a call with an agent. Retailer J subsequently refunded £1,200 (payments 2-4), but Mrs V lost £400 (payment 1) and complained that NewDay should have questioned her further, similar to how Retailer J intervened. The ombudsman rejected the complaint, finding that payment 1 was not unusual enough to trigger intervention, the fraud alert related to account security rather than fraud, and the agent was not obliged to ask probing questions about gift card purchases made on the same day.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017 and FCA Consumer Duty, recognising that while authorised payments generally remain the payer's liability, financial firms should protect customers against fraud where reasonably possible. However, the ombudsman found that payment 1 was a relatively low amount for a financial institution processing thousands of daily payments, the payee was legitimate, and the fraud alert was triggered for account security reasons rather than fraud concerns. The agent correctly verified Mrs V's identity. While Mrs V mentioned making further gift card orders, this was not unusual enough to warrant probing questions on payment 1, particularly given the call recording quality issues and the legitimate context of purchasing multiple vouchers on the same day. The ombudsman would have reached a different conclusion if the system codes indicated fraud concerns, if the call occurred on payments 2-4, or if Mrs V had disclosed the purchase amounts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website