Not upheld: fraud and scam - investment scam, refund claim complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr O complained that Barclays Bank UK PLC should refund approximately £100,850 he lost when he made payments to a fraudulent investment scheme after seeing an advert on social media. He made three payments to account details provided by a broker, believing the funds would be invested legitimately, but the investment company subsequently stopped communicating and he could not withdraw his funds. Barclays intervened on the two larger payments in June 2022, warned Mr O about scams, and recorded that Mr O claimed the payments were for a building project overseas and confirmed he had completed checks. The ombudsman found the circumstances did not meet the CRM code definition of a scam because there was insufficient evidence the broker intended fraud or engaged in dishonest deception, and that Barclays' intervention was appropriate given Mr O's misleading statements about the payment purpose. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the CRM code definition of a scam, which requires that the customer transferred funds for what they believed were legitimate purposes but were in fact fraudulent, and that the broker's intentions differed from the customer's through dishonest deception. While the investment company may have been operating a scam, there was insufficient evidence that the broker Mr O directly paid intended a different purpose or knew the investment company was fraudulent. Both Mr O and the broker appeared to intend for the funds to be legitimately invested. Regarding Barclays' intervention, while the records were brief, they were contemporaneous and credible. Mr O had given misleading information about the purpose of the payments (claiming they were for a building project, not investment), and would likely have continued to do so even with more probing questions. Therefore, more intensive intervention would not have prevented the payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website