Not upheld: unauthorised transactions / fraud claim complaint against Metro Bank PLC

Decision detail

Summary

Mrs M and Mr L complained that Metro Bank PLC failed to refund three disputed international payments totalling £25,996 made from their joint account in May and June 2025. Mrs M claimed the payments were unauthorised and made while her phone was out of her possession. Metro declined the fraud claim, believing the payments were authorised or that Mrs M's security credentials had been compromised. The ombudsman examined electronic records, account activity, and the circumstances surrounding the transactions and concluded on the balance of probabilities that Mrs M had authorised the payments, finding the fraudster scenario implausible and noting that her phone must have been in her possession during the disputed transactions based on other account activity and the requirement for OTPs. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test, starting from the presumption under PSRs that Mrs M is liable for authorised payments and Metro must reimburse unauthorised ones. The key findings were: (1) electronic evidence conclusively shows Mrs M's phone was used to make all payments with consistent device identifiers; (2) for the third payment, Mrs M's phone was confirmed to be in her possession, and only she could have received the required OTP, strongly suggesting she also made the first two payments; (3) the scenario of a fraudster finding the phone at her workplace, committing fraud, and returning it is implausible; (4) a fraudster would need to know both the phone passcode and banking credentials with no reasonable explanation for how this occurred; (5) the undisputed account activity (regular small transfers and day-to-day spending) proves Mrs M had possession of the phone on multiple dates including during the disputed transaction period; (6) the timing of funds being transferred into the account immediately before the disputed payments is too coincidental; (7) Mrs M's failure to notice £26,000 missing from a carefully maintained account for weeks, despite regular monitoring, suggests she knew the money was gone because she made the payments; (8) Mrs M's inconsistent explanations for how the phone was lost undermines her credibility; (9) while hacking and cloning are technically possible, they are uncommon and lack reasonable explanation in this case.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website