Not upheld: failure to monitor account for signs of compulsive spending and vulnerability; failure to intervene or block merchant complaint against Wise Payments Limited (trading as Wise)

Decision detail

Summary

Mr B complained that Wise failed to identify and intervene in his compulsive spending of approximately £5,300 to a single merchant between February 2024 and April 2025, despite the pattern of transactions suggesting vulnerability. He sought a full refund plus interest and wanted Wise to acknowledge failures in protecting vulnerable consumers. Wise rejected the complaint, explaining that Mr B authorised all payments, the transactions did not trigger fraud alerts, and it lacked a system to block merchants. The ombudsman did not uphold the complaint, finding that the account was well-maintained with no financial difficulty, individual transaction amounts were small, and Mr B never disclosed compulsive spending issues to Wise until after he had already stopped the payments, providing no reasonable trigger for manual intervention.

The Ombudsman's reasoning

The ombudsman found that Wise had no reasonable cause to intervene because: (1) the account was well-maintained and in credit, showing no financial difficulty; (2) individual transaction amounts were small and would not trigger fraud alerts; (3) transactions were made from recognised devices using Mr B's own funds; (4) the merchant's MCC codes were not high-risk; (5) Mr B did not contact Wise about compulsive spending until after he had already stopped the payments; and (6) FCA guidance on monitoring for unusual activity applies in the context of fraud detection and requires customer engagement, which did not occur here. The ombudsman noted that financial businesses must process authorised payments under PSRs, and nothing in the transaction pattern would have reasonably triggered manual review.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website