Partially upheld: scam / fraud prevention / failure to intervene on suspicious transactions complaint against ClearBank Limited

Decision detail

Summary

D, a company directed by Mr and Mrs E, complained that Tide (ClearBank Limited) failed to prevent losses from a scam where Mrs E was tricked into approving two card payments via 3DS authentication after receiving a fraudulent call impersonating Tide. Although Mrs E was manipulated, she did confirm the payments in the banking app, making them technically authorised under the Payment Services Regulations. The ombudsman found Tide was not obliged to intervene on the first payment as it was not sufficiently out of character, but should have intervened on the second payment because a suspicious pattern had emerged with multiple declined payment attempts. Tide was ordered to reimburse the second payment of £3,375 plus 8% interest.

The Ombudsman's reasoning

Under the Payment Services Regulations 2017, the starting point is that D is liable for authorised payments. Mrs E clearly confirmed both payments in the banking app after logging in, meaning Tide was entitled to treat them as authorised. However, payment service providers have a responsibility to prevent foreseeable harm and should intervene where suspicious patterns emerge. While the first payment was not sufficiently out of character to require intervention, by the second payment a suspicious pattern had clearly emerged with multiple declined attempts, making intervention reasonable and likely to have prevented the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website