Not upheld: fraud and scams - alleged scam gambling operation complaint against Lloyds Bank Plc

Decision detail

Summary

Mr H, a self-identified gambling addict signed up to GamStop, lost approximately £40,099.88 (net of credits) to an overseas casino called Company D between September and October 2024. He claims Company D operated a scam by imposing withdrawal limits and forcing him to continue gambling to achieve VIP status. Mr H complained to Lloyds Bank Plc seeking a refund, arguing they failed to protect him as a vulnerable customer. Lloyds rejected the complaint, stating they found no evidence of fraud and that the payments were consistent with his account usage. The ombudsman upheld Lloyds' decision, finding insufficient evidence that Company D was operating a scam and that Lloyds could not have identified the payments as going to a gambling company.

The Ombudsman's reasoning

The ombudsman found that there was insufficient evidence to establish that Company D was operating a fraudulent scam meeting the high legal threshold and burden of proof for fraud. While overseas gambling companies may not seek UK registration or adhere to UK regulatory standards, this alone does not indicate fraudulent intent. The ombudsman noted that credits were received and payments made after the disputed transactions, and that regulated Company N's information conflicted with Mr H's claims about funds being withheld. Even if Company D were operating a scam, Lloyds could not have identified that the payments were going to a gambling company, as the payments were consistent with Mr H's established pattern of high-value faster payments to various beneficiaries. Therefore, Lloyds' primary obligation was simply to process the authorised payments without delay, and they had no obligation to protect against fraud in this case.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website