Not upheld: scam/fraud - failure to prevent authorised push payment (APP) scam and inadequate recovery complaint against Lloyds Bank PLC

Decision detail

Summary

Miss R made two international payments totalling £6,900 in January and February 2025 to a travel agent for a holiday, which turned out to be a scam. After discovering the fraud, she requested Lloyds to recover the funds. Lloyds recovered £3,802.53 on a best endeavours basis but explained the remaining funds were outside the scope of mandatory reimbursement as they were international payments. Miss R complained that Lloyds should have identified the payments as suspicious and taken further recovery steps. The ombudsman found that based on Miss R's historic account activity including international payments in Euros, the transactions were not sufficiently unusual to require intervention, and Lloyds took reasonable recovery steps given it was only notified two months after the payments were made. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations and noted that while the Reimbursement Rules came into force on 7 October 2024, they do not cover international payments converted to foreign currency. Considering Miss R's historic account activity, the payments were not sufficiently unusual or suspicious to require Lloyds to intervene before processing. The £4,900 payment, while larger than some transactions, was not significantly larger than other regular payments and the account had historically seen international payments in Euros. Additionally, Lloyds only became aware of the fraud two months after the second payment, making fund recovery highly unlikely despite best endeavours attempts. The £50 compensation for poor service was deemed fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website