Partially upheld: Failure to prevent Authorised Push Payment (APP) fraud / irresponsible payment processing complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr T met someone via a dating site in September 2024 who introduced him to an investment opportunity. Over three months, Mr T made 24 payments totalling £18,776 to a cryptocurrency provider account in his own name, funded partly by three loans, before discovering the investment was a scam. Barclays refused to refund the loss, arguing the payments were to Mr T's own account and consistent with his account activity. The ombudsman partially upheld the complaint, finding that when Mr T received a £2,700 loan on 28 November 2024 and immediately dispersed all funds to the crypto account (after 13 prior payments to the same account), Barclays should have recognised heightened fraud risk and intervened with human contact to make enquiries. The ombudsman concluded that such intervention would have prevented further losses, but Mr T bore equal responsibility (50%) for failing to verify the opportunity or question the rapid trust development with someone met on a dating site. Barclays was ordered to refund 50% of payments from 30 November 2024 onwards (£4,370) plus 8% simple interest.

The Ombudsman's reasoning

The ombudsman found that while Barclays had no contractual duty to prevent payments, it had a regulatory duty under FCA principles and anti-money laundering requirements to monitor accounts for fraud risks. The specific trigger for intervention was payment 14 (30 November 2024): Mr T had already made 13 payments to a cryptocurrency provider account in his own name, then received a £2,700 loan which was entirely dispersed to the same crypto account within 2 days. This pattern—loan funds immediately sent to crypto—combined with Barclays' knowledge of multi-stage crypto scams since 2018, created heightened fraud risk. The ombudsman rejected the argument that payments to the customer's own account reduced fraud risk, noting that multi-stage fraud deliberately uses such accounts to circumvent security. Had Barclays intervened with human contact (phone/chat) to ask questions about the loan-funded crypto payment, Mr T would likely have disclosed the recent relationship with Z and the investment opportunity, prompting an effective warning. However, Mr T bore equal responsibility because he: (1) invested within days of meeting Z on a dating site; (2) took out multiple loans without verifying the opportunity; (3) failed to question the rapid trust development; and (4) did not take reasonable steps to verify Z's claims despite the suspicious circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website