Not upheld: alleged fraud and unauthorised transactions complaint against Lloyds Bank PLC

Decision detail

Summary

The estate of Ms C, represented by her daughter Mrs K, complained that Lloyds Bank failed to protect Ms C's account from fraudulent use after discovering transfers totalling over £63,000 to Mrs W (Ms C's granddaughter and carer) made between 2019 and 2023. Mrs K contended that Ms C, who was vulnerable due to age and health issues, did not authorise these payments and that Lloyds should have intervened based on the unusual account activity. The ombudsman found that the transactions were authorised under the Payment Service Regulations 2017, either directly by Ms C or through apparent authority granted to Mrs W as her carer and Power of Attorney, and that Lloyds acted reasonably in processing them without intervention. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the transactions were authorised under the Payment Service Regulations 2017, either because Ms C directly consented or because she gave Mrs W apparent authority to access her accounts and finances. The ombudsman noted that Ms C signed a POA document in March 2022 with independent witness verification, demonstrating mental capacity at that time. The ombudsman found it plausible that Ms C agreed to the payments given the three to four year timeframe and the fact that Mrs W was her established carer with known access to her financial affairs. Regarding monitoring obligations, the ombudsman concluded that the increase in account outgoings (approximately £8,000 over three years) was not significant enough to trigger intervention, particularly as Mrs W was an established and trusted payee and payments were made via genuine online banking. The ombudsman could not fairly conclude that Ms C did not authorise the payments in the absence of her testimony.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website