Not upheld: scam loss recovery and fraud liability complaint against HSBC UK Bank Plc trading as first direct

Decision detail

Summary

Ms B complained that first direct should refund money she lost to an investment scam after making several payments in May 2025 to what she believed was a legitimate investment opportunity found on social media. She made payments from her first direct account to a money remittance service in her own name, which were subsequently withdrawn. The ombudsman found that while Ms B proved she authorized and made the payments, she failed to provide sufficient evidence that the funds were actually lost to scammers or that the remittance service beneficiary was the scammer. Under the Payment Services Regulations 2017, customers are presumed liable for authorized payments in the first instance, and the ombudsman could not establish that first direct was responsible for the loss. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities standard and found that while Ms B authorized the payments and made transactions to a remittance service, she failed to provide sufficient evidence linking those funds to a scam or showing the beneficiary was a scammer. The ombudsman noted that under the Payment Services Regulations 2017, customers are presumed liable for authorized payments in the first instance. Although banks may take additional protective steps, the ombudsman could not establish that first direct was responsible for the loss because the causal link between the payments and the alleged scam was not evidenced.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website