Not upheld: scam/fraud - failure to prevent payments to cryptocurrency exchanges complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr H fell victim to a cryptocurrency investment scam perpetrated by an individual who promised large returns and subsequently demanded additional payments to withdraw funds. Mr H made 22 payments totalling £18,543.09 to legitimate cryptocurrency exchanges via debit card before realising the scam. Barclays offered 50% refund from payment 3 onwards plus compensation. The ombudsman found Barclays should have intervened from payment 6 (£4,000) but upheld the 50% refund offer as fair given Mr H's contributory negligence in investing without advice and ignoring warning signs. The complaint was not upheld as Barclays' offer was deemed reasonable.

The Ombudsman's reasoning

While Mr H authorised the payments, banks have a duty to protect against fraud and undertake due diligence on large transactions. The ombudsman found that payment 6 (£4,000 to Coinbase) was substantial and clearly cryptocurrency-related, triggering higher risk. Barclays should have intervened from this point with discussion and warning. However, Mr H contributed to his loss by investing in an unfamiliar area without advice, accepting unrealistic returns, making payments to withdraw funds (unusual), accepting financial assistance from the scammer, and continuing despite concerns. A 50% reduction in compensation was therefore fair to reflect shared responsibility.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website