Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc trading as First Direct

Decision detail

Summary

Ms K fell victim to a sophisticated job scam in May-July 2025, making 54 payments totalling £39,825 from her First Direct account to crypto exchanges and digital money transfer services. She was grieving and vulnerable, and the scammer manipulated her into believing she was earning commission while requiring her to make payments to access funds. Although First Direct implemented only two human interventions and missed opportunities to intervene at critical points when payment patterns became suspicious, the ombudsman found that First Direct should have implemented stronger interventions. However, the complaint was not upheld because the ombudsman was not satisfied that such interventions would have prevented the loss, given Ms K's determined mindset, her consistent untruthfulness to all banks, and her willingness to disregard even strong, relevant warnings from Bank H.

The Ombudsman's reasoning

The ombudsman found that First Direct should have implemented stronger interventions at specific payment points (automated warning at payment 20 on 26 June; human interventions at payments 26, 41, and 49 on 4 and 13 July) given the unusual velocity, increasing amounts, and elevated crypto fraud risk. However, the ombudsman was not persuaded that such interventions would have prevented Ms K's loss because: (1) Ms K was under the scammer's spell and viewed bank interventions as a nuisance to tolerate; (2) she was consistently untruthful to all banks and created plausible cover stories; (3) even Bank H's strong, highly relevant intervention on 20 June covering the exact job scam did not deter her; and (4) had First Direct blocked her account like Firm R did, she would likely have found alternative ways to make payments. Therefore, causation was not established.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website