Partially upheld: inadequate intervention in investment scam; failure to provide effective warnings about cryptocurrency investment scams complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr W lost £49,202 to an investment scam operating via social media, making payments to cryptocurrency exchanges between July 2020 and January 2021. Barclays intervened on several occasions but only asked basic questions without providing context-specific warnings about investment scams, despite Mr W disclosing the investment purpose. The ombudsman found Barclays failed to conduct sufficiently probing questioning and would have prevented the loss from Payment 3 onwards had it intervened properly. However, Mr W is found 50% contributory negligent for failing to conduct due diligence that would have revealed negative reviews. Barclays is ordered to pay £19,050.51 plus 8% simple interest.

The Ombudsman's reasoning

Barclays was obliged to follow Mr W's payment instructions, but had a regulatory duty to monitor accounts and prevent fraud/scams. While Payment 1 was not out of character and Payment 2 was too small to warrant intervention, Payments 3 onwards were out of character and required intervention. Barclays did intervene but failed to ask clear, open and probing questions or provide warnings specific to investment scams despite Mr W disclosing the investment purpose. The account notes and call recordings show only basic questions were asked without context linking to investment scam hallmarks. Had Barclays intervened properly, Mr W would not have continued with the payments. However, Mr W bears 50% contributory negligence for failing to conduct adequate due diligence - he should have found negative reviews online warning of the scam, and should have questioned the implausibility of 60% returns.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website