Not upheld: fraud claim and irresponsible lending complaint against National Westminster Bank Public Limited Company

Decision detail

Summary

Mr D complained that NatWest unfairly held him liable for balances on three credit cards that were accumulated when he was blackmailed and coerced into disclosing his online banking details and posting the physical cards and PINs to the perpetrators. The ombudsman found that although Mr D acted under duress, his consent to provide the cards to third parties was valid under the Payment Service Regulations 2017, making the transactions authorized and Mr D liable for the balances. The ombudsman also found that NatWest's monitoring and intervention obligations were not breached, as the new cards had no spending history to trigger concern and intervention on the existing card would likely have been unsuccessful. The credit card applications were reasonably approved based on affordability assessments. The complaint was not upheld, though the ombudsman reminded NatWest to treat Mr D sympathetically given his financial difficulties.

The Ombudsman's reasoning

Under the Payment Service Regulations 2017 and Consumer Credit Act 1974, a consumer is liable for authorized transactions and for misuse of credit facilities if the credit tokens were in a third party's possession with the consumer's consent. Although Mr D was under duress and coercion, these circumstances do not invalidate consent for regulatory purposes. Mr D knowingly provided all three cards and PINs to the blackmailers. Regarding NatWest's monitoring obligations, the ombudsman found no reasonable grounds for intervention on the new cards due to lack of spending history, and intervention on the existing card would likely have been unsuccessful given Mr D's dishonesty when questioned and the bank's lack of his genuine telephone number. The credit card applications were reasonably approved based on the affordability assessment showing sufficient net free funds even using Mr D's genuine income.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website