Not upheld: scam-related lending liability complaint against Plata Finance Limited trading as Plata

Decision detail

Summary

Ms A complained that Plata Finance Limited was holding her liable for a £5,000 loan that she claimed she was deceived into taking out as part of a scam. She had been contacted by individuals impersonating financial advisors who convinced her to take the loan to pay fees for releasing supposed investment profits; the funds were then transferred to scammers. The ombudsman did not uphold the complaint, finding that Plata provided the loan in good faith with no knowledge of the scam and could not reasonably have prevented the fraud. While expressing sympathy for Ms A's situation, the ombudsman concluded that responsibility for losses caused by criminal third parties cannot fairly be transferred to the lender. However, the ombudsman expected Plata to work with Ms A on a sustainable repayment arrangement given her circumstances.

The Ombudsman's reasoning

While the ombudsman expressed sympathy for Ms A's situation as a scam victim, it concluded that Plata was not responsible for losses caused by criminal third parties that it could not reasonably have prevented. The lender provided credit in good faith and had no visibility of the scam. Ms A entered into the loan agreement voluntarily, and responsibility for repayment cannot be transferred to the lender simply because the funds were subsequently misappropriated by scammers. However, Plata should treat Ms A with empathy and work toward a sustainable repayment arrangement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website