Not upheld: scam losses and fraud protection complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr T complained that HSBC should refund losses he suffered when he fell victim to a cryptocurrency investment scam. Between August 2020 and September 2024, Mr T made multiple payments from his HSBC account to genuine crypto providers, which were then forwarded to scammers who promised investment returns and requested fees for withdrawals. The ombudsman found that HSBC was not responsible because Mr T had authorised the payments and they were not sufficiently unusual or suspicious to warrant intervention. The payments were low value, spread across months and years, and consistent with the customer's account activity, so HSBC had no reasonable grounds to suspect fraud or take additional protective steps.

The Ombudsman's reasoning

The ombudsman applied the legal starting position that banks must process authorised payments and customers are presumed liable for losses. However, banks may need to take additional steps to protect customers from fraud in certain circumstances. The ombudsman reviewed whether HSBC should have identified the payments as suspicious. Considering the payment values, timing, frequency, and that they were to genuine crypto providers in the customer's own name, the ombudsman concluded the payments were not sufficiently unusual or suspicious to warrant additional enquiries. While acknowledging known fraud risks with crypto, the ombudsman noted that legitimate crypto investment is common and banks must balance fraud prevention with allowing customers to use their accounts. The ombudsman also found that even if alerted earlier, HSBC could not have recovered the funds due to the nature of crypto transfers and expired chargeback time limits.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website