Not upheld: scam - investment fraud reimbursement claim complaint against Lloyds Bank Plc

Decision detail

Summary

Mr T complained that Lloyds Bank Plc failed to protect him from a well-known investment scam involving Company H, seeking a refund of £43,120 in payments made to crypto exchanges between March 2021 and February 2023, plus £1,000 compensation. He became suspicious in February 2023 when attempting to withdraw funds and later realised he had been scammed. Lloyds rejected the complaint citing the Contingent Reimbursement Code did not apply. The ombudsman found that while Mr T's testimony was credible and the payments were verifiable, there was insufficient evidence to establish that a scam had occurred or that the ultimate beneficiary was Company H, as Mr T could not provide investment documentation or communications with Company H representatives. The complaint was not upheld as the high legal threshold for fraud could not be met without additional corroborating evidence.

The Ombudsman's reasoning

Although the ombudsman did not disbelieve Mr T's account, there was insufficient evidence to establish that a scam had taken place. While Mr T's testimony, crypto transactions, and recovery group communications were considered, the high legal threshold for fraud required additional evidence to demonstrate the payments went to Company H. Critically, Mr T could not provide evidence of the investment agreement, expected returns, payment terms, or any communications with Company H representatives. Without establishing that a scam occurred, Lloyds could not be held responsible for reimbursement under the Payment Service Regulations (2017) and account terms and conditions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website