Not upheld: fraud - authorised push payment (APP) scam; failure to prevent financial harm complaint against The Co-Operative Bank P.L.C.

Decision detail

Summary

Mr and Mrs S lost nearly £50,000 to an investment scam between November 2024 and March 2025, sending multiple payments to cryptocurrency exchanges that were ultimately transferred to scammers. They complained to Co-Op Bank, arguing it should have prevented the fraud through more rigorous questioning of their transactions. While the bank did question a £6,200 payment in January 2025 and warned about investment scams, Mr S did not disclose that a third party would be managing the investments, instead claiming the decisions were his own. The ombudsman found that the bank's intervention was appropriate given the information provided, and there was insufficient evidence that further questioning of later payments would have prevented the losses, given the sophisticated and convincing nature of the scam. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

The ombudsman found that while Co-Op Bank should have intervened on the £6,200 payment in January 2025 and did so appropriately by questioning Mr S, the customer provided inaccurate information by not disclosing that a third party would be managing the investments. The bank gave Mr S ample opportunity to reveal this involvement but he declined, stating the decisions were his own. Without accurate information, the bank was entitled to believe this was legitimate personal cryptocurrency trading. Regarding later payments, there was insufficient evidence that further interventions would have been successful in stopping the scam, particularly given the sophisticated nature of the fraud and the factors that made it appear legitimate to the victims. The payments could not be recovered through chargeback as they were made to legitimate cryptocurrency exchanges that provided the service requested, with the scam occurring at the point the cryptocurrency was transferred to scammer-controlled wallets.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website