Not upheld: scam protection and fraud liability complaint against Santander UK Plc

Decision detail

Summary

Mr I complained that Santander failed to protect him from a scam after he lost £14,500 in a forex investment scheme. He made a card payment to merchant K in September 2019 as part of an investment opportunity offered via social media by unregulated company G, which promised 10% monthly returns. The funds were subsequently lost through trading on platform X. While the ombudsman acknowledged hallmarks of investment scams in the scheme's structure and G's conduct, it found no evidence that the specific card payment to K was connected to the investment or that Mr I was deceived about its purpose. Additionally, the ombudsman could not verify the source of the funds used for the payment due to multiple undocumented cash deposits and transfers. Consequently, the complaint was not upheld as the ombudsman could not establish both that the funds belonged to Mr I and that the loss resulted from a scam.

The Ombudsman's reasoning

The ombudsman concluded that while some aspects of the circumstances bore hallmarks of investment scams (social media advert, unrealistic returns, instant messaging contact), the key issue was that the disputed card payment went to K, a seemingly legitimate merchant offering training courses, not to G or the investment platform. The ombudsman found no evidence that Mr I was deceived about the purpose or destination of the K payment, no corroboration that it was connected to the investment scheme, and critically, could not establish that the funds belonged to Mr I due to insufficient documentation of the source of the cash deposits and transfers that funded the account. Without satisfying both that the funds belonged to Mr I and that the loss resulted from a scam, the ombudsman could not hold Santander responsible. The ombudsman acknowledged likely wrongdoing by G but distinguished between G's unregulated activities and the payment destination.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website