Not upheld: unauthorised transactions and loan application complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr W complained that Halifax held him liable for unauthorised activity on his account totalling £5,160, including a £2,400 loan and payments made after his phone was lost on 25 December 2024 while he was outside the UK. He suspected a named individual from the bar where he lost his phone was responsible and provided a third party statement claiming the suspect admitted to taking the phone and money. The ombudsman found no plausible explanation for how the suspect could have accessed the memorable information required by Halifax's app security, and noted the account activity pattern (slow spending, monthly standing order setup) was inconsistent with typical unauthorised use, leading to the conclusion that Halifax's decision was reasonable.

The Ombudsman's reasoning

The ombudsman found no plausible explanation for how the memorable information could have been compromised, particularly given it requires random character selection via drop-down menu and cannot be pre-populated. The account activity pattern was inconsistent with typical unauthorised use - a dishonest party would likely have moved the £2,000+ credit balance more quickly, and setting up a monthly standing order is uncommon in unauthorised account access. While acknowledging the third party statement and police involvement, these did not change the conclusion that Halifax's decision to hold Mr W liable was reasonable based on available information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website