Partially upheld: refusal to refund payments obtained through romance scam / fraud complaint against PayPal UK Ltd

Decision detail

Summary

Mrs S complained that PayPal should refund approximately £3,000 in payments she made to purchase TikTok coins as gifts to an online influencer who had manipulated her through a romance scam. PayPal wrote off a £3,000 credit facility but declined to refund the other payments, noting they were sent to a legitimate account in Mrs S's own name and she received what she paid for. The ombudsman found the payments were authorised and that while PayPal had duties regarding vulnerable consumers and fraud detection, the payments were not sufficiently suspicious to warrant intervention. The ombudsman concluded that even if PayPal had questioned the payments, Mrs S would likely have continued sending money given her emotional attachment to the influencer and her rejection of warnings from others. The complaint was partially upheld only regarding PayPal's error in continuing to contact Mrs S about the credit facility after it had been written off, for which £300 compensation was awarded.

The Ombudsman's reasoning

The ombudsman found that while Mrs S was heavily manipulated, the payments were authorised as she knowingly instructed them and knew where the money was going. Although PayPal had a duty to identify vulnerable consumers and look for payments indicating financial harm, the payments were mostly low value, spread over time, and to a legitimate merchant, so they were not particularly suspicious. Even if PayPal had contacted Mrs S to question the payments, the ombudsman concluded it was unlikely she would have stopped sending money given the strength of her emotional attachment to the influencer and her rejection of warnings from others. The ombudsman could not reasonably conclude that PayPal's intervention would have prevented the losses. The money could not be recovered as it had been spent on the TikTok account. However, the ombudsman upheld the complaint in part regarding PayPal's error in continuing to contact Mrs S about the credit facility after it had been written off.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website