Not upheld: Fraud reimbursement (APP scams) complaint against Lloyds Bank PLC

Decision detail

Summary

Miss B complained that Lloyds Bank PLC unfairly held her responsible for approximately £5,604 in disputed transactions made after her phone was stolen on 08 April 2025. Miss B claimed a third party accessed her account without authorization, but Lloyds argued the technical evidence showed the correct password and memorable word were used on first attempt with no failed log-on attempts. The ombudsman found that the technical evidence, combined with the five-day delay before payments were made (atypical of fraud), evidence that Miss B's other bank account was accessed via Face ID, and evidence that Miss B did not successfully contact Lloyds when receiving notifications about new payees, demonstrated that Miss B more likely than not authorized the payments or provided authorization to a third party. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities standard given incomplete and contradictory evidence. The key persuasive factors were: (1) the technical evidence showing the correct password and three randomly selected characters from the memorable word being entered correctly on first attempt, which Miss B claimed were not saved on the stolen device; (2) the atypical timing of the fraud (five days after theft rather than immediate withdrawal attempts); (3) evidence that Miss B's other bank account was accessed via Face ID without password changes; and (4) evidence that Miss B did not successfully contact Lloyds when she received notifications about new payee setup, undermining her claim of attempting to report fraud immediately. The ombudsman concluded that Miss B more likely than not authorized the payments or provided authorization to a third party.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website