Not upheld: unauthorised payments / scam liability complaint against THE ROYAL BANK OF SCOTLAND PUBLIC LIMITED COMPANY (RBS)

Decision detail

Summary

Mr O complained that RBS should refund payments he claimed he did not authorise after falling victim to a scam where someone fraudulently opened an account in his name using personal details he had shared. The scammer then made payments from the account using Apple Pay and faster payments, running up an overdraft of approximately £3,250. Mr O received multiple text messages from RBS confirming the account opening, identity verification, and setup of payment methods, and he shared the OTP with the scammer. The ombudsman found that Mr O was aware of the account opening, participated in the process, and by sharing the OTP and other information with the scammer, he represented to RBS that the scammer had authority to make the payments. Accordingly, the complaint was not upheld and Mr O was held liable for the overdrawn balance.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which establish that consumers are generally responsible for authorised payments and businesses for unauthorised payments. The key finding was that Mr O was aware an account had been opened in his name, participated in the account opening process by completing identity verification, and crucially shared information (including the OTP) with the scammer that enabled the payments to be made. By sharing this information, Mr O represented to RBS that the scammer had authority to make the payments, even though Mr O did not complete all steps himself. The ombudsman found that Mr O's concerns about repercussions from the scammer were not relevant considerations under the applicable rules. The ombudsman also concluded that the account activity was not unusual enough to trigger RBS's fraud detection systems, and even if RBS had intervened, there was insufficient evidence to show intervention would have prevented further payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website