Not upheld: Fraud reimbursement (APP scams) complaint against MoneyGram International Limited

Decision detail

Summary

Mr P lost money to investment fraud after making an international money transfer via MoneyGram following a social media advertisement. He later discovered the investment was fraudulent and sought reimbursement from MoneyGram. The ombudsman found the complaint not upheld because the payment was authorised and fell outside the scope of the Reimbursement Rules as an international transfer. While MoneyGram should ordinarily look for suspicious transactions, the single payment from a newly opened account did not present sufficient risk indicators to require intervention, and even if it had, Mr P's deliberate concealment of the true purpose and his trust in the fraudsters made intervention unlikely to succeed.

The Ombudsman's reasoning

While MoneyGram has an obligation to look for suspicious transactions and intervene where fraud risk is identified, the payment in question did not present enough risk indicators to trigger intervention. The account had no prior activity to establish payment patterns, the payment amount was not unusual for MoneyGram's typical transaction volumes, and MoneyGram is not a traditional bank. Additionally, even if MoneyGram had intervened, it would likely have been unsuccessful in preventing the payment because Mr P was deliberately concealing the true purpose, had placed his trust with the fraudsters rather than his payment provider, and had demonstrated willingness to use alternative payment methods when blocked.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website