Partially upheld: investment scam - failure to intervene and prevent fraud complaint against Santander UK Plc

Decision detail

Summary

Mr G lost £19,003 to an investment scam after being contacted on social media by a scammer posing as an investment broker for a fake company. He made four payments via his Santander account to a crypto exchange between January 9-25, 2024, believing he was making legitimate investments with promised 150% returns. When he attempted to withdraw funds, he was asked to pay fees and realised the scam. The ombudsman found Santander should have implemented a tailored warning at payment 3 (£5,000) and human intervention at payment 4 (£12,000) given the unusual pattern of increasing crypto payments to a new payee. These interventions would more likely than not have prevented the loss. However, the ombudsman found Mr G also bore responsibility for insufficient due diligence, resulting in a 50/50 apportionment of liability. Santander was ordered to refund 50% of payments 3 and 4 (£8,500) plus 8% simple interest.

The Ombudsman's reasoning

The ombudsman found that while Mr G authorised the payments, Santander had a duty under the Payment Services Regulations 2017 and FCA Consumer Duty to protect customers against fraud and scams so far as reasonably possible. By payment 3, a fraud pattern was emerging with increasing crypto payments to a new payee within days, which was unusual for Mr G's account. A tailored warning about crypto investment scams at payment 3 would more likely than not have resonated with Mr G given the scam featured all common characteristics (social media introduction, fake account manager, fake unregulated company, promises of high returns). At payment 4, the high amount (£12,000) and cumulative spend (£19,003 in less than two weeks) warranted human intervention. The ombudsman concluded that such interventions would have uncovered the scam. However, Mr G bore some responsibility for lack of due diligence, so liability was shared equally at 50% each for payments 3 and 4.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website