Not upheld: investment scam - failure to prevent fraud complaint against Santander UK Plc

Decision detail

Summary

Mr K, a senior citizen, lost £173,972 to an investment scam after being directed to transfer funds through Firm W (a regulated Electronic Money Institute) to a fake trading platform. Santander implemented human intervention for each payment attempt, during which agents probed Mr K's intentions and provided scam warnings and education. Mr K consistently provided a detailed and plausible cover story about funding a cruise and repeatedly denied being told to lie or manipulated, despite direct questioning. The seventh payment was blocked when Santander became suspicious. Mr K complained that Santander should have detected the scam earlier, citing his age, the unusual payment pattern, and the concentration of transfers to a new payee. The Ombudsman found that while Santander should monitor for fraud, they must balance intervention against inconveniencing legitimate transactions, and that the scam could not have been reasonably prevented given Mr K's convincing false explanations and consistent dishonesty during calls.

The Ombudsman's reasoning

The Ombudsman found that while Santander should monitor accounts for fraud and implement interventions when suspicious activity is detected, they must balance this against unnecessarily inconveniencing legitimate transactions. Santander did implement the highest level of intervention (human intervention) for each payment. The scam could not have been uncovered because Mr K provided extremely plausible, detailed, and consistent false explanations (a cover story about a cruise) and repeatedly denied being manipulated or told to lie, despite being directly asked. The Ombudsman found the intervention calls to be strong, with agents probing effectively and providing scam education. Mr K's age and health, while potential risk indicators, could not be viewed in isolation, and his confident, articulate demeanor did not present behavioural signs of vulnerability or dishonesty. The first time Santander had genuine cause to be suspicious was at payment 7, when they appropriately requested a Firm W statement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website