Not upheld: investment scam - refusal to refund complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr Q complained that HSBC should refund losses he suffered when he fell victim to an investment scam between January and February 2025. He sent multiple payments from his HSBC account to crypto exchange providers in his own name, which were then forwarded to the scammer. HSBC intervened twice, blocking payments and providing scam warnings, and Mr Q also received warnings from two other banks. The ombudsman found that while HSBC provided proportionate warnings, the key issue was whether further intervention would have prevented the loss. The ombudsman concluded it would not have, because Mr Q had built significant trust with the scammer and was receiving detailed coaching on how to complete transactions, as evidenced by scam chat messages. Therefore, the complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017 and relevant FCA guidance on fraud prevention. While finding that HSBC should have systems to monitor for unusual transactions and in some circumstances take additional steps, the ombudsman concluded that the key issue was causation: whether further intervention by HSBC would have prevented the loss. The ombudsman found that Mr Q had built significant trust with the scammer and was receiving detailed coaching on how to complete transactions. The scam chat evidence showed Mr Q actively seeking help from the scammer to overcome obstacles. Even though HSBC provided proportionate warnings on two occasions, the ombudsman found that further questioning would not have broken 'the scammer's spell' given the level of trust and guidance Mr Q was receiving. The ombudsman also noted that funds had already been transferred to crypto accounts in Mr Q's own name before being sent to the scammer, so recovery would not have been possible.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website