Not upheld: investment scam protection and irresponsible payment processing complaint against Lloyds Bank PLC

Decision detail

Summary

Miss K complained that Lloyds Bank unfairly refused to fully refund £15,000 she paid to an investment broker after being introduced to an investment manager named F through a mutual friend. Miss K made three payments totalling £15,000 in May 2024, which F claimed were lost in trades within days. Lloyds partially upheld the complaint and refunded 50% of two of the payments. The ombudsman did not uphold the complaint, finding that it was unclear whether Miss K had been the victim of a scam (as F met her in person and was known to a friend) and that any intervention by Lloyds would not have prevented the payments, given that Miss K had researched the legitimate, regulated investment broker and trusted F.

The Ombudsman's reasoning

The ombudsman found that while Miss K had lost money, it was not clear she had been the victim of a scam. The evidence showed F indicated he had investment experience and lost money in trades, but there was no clear evidence F tricked Miss K into giving him money for himself. The fact that F met Miss K in person and was known to a friend of hers made it highly unusual for this to be a scam, as scammers would be easy to trace. Even if a scam had occurred, the ombudsman was not persuaded that intervention by Lloyds would have prevented the payments. Miss K had researched the legitimate, regulated investment broker, had met F in person, and trusted him. Any warnings from Lloyds about the risks of giving account access to a third party would likely not have changed her decision, as she was already aware of such risks. Additionally, the delay in reporting (over one year) and the use of funds for legitimate trades meant recovery was not possible.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website