Partially upheld: Motor insurance, claim handling complaint against Santander UK Plc

Decision detail

Summary

Mr J, a senior citizen, fell victim to a cryptocurrency investment scam in October 2025 after being contacted by a fraudster posing as a financial manager. When Mr J's family became suspicious and called Santander on 10 October to report the scam, Santander failed to locate a newly opened current account due to an address discrepancy and did not provide education on investment scam risks. Despite being told it was likely a scam, Mr J was later re-engaged by the scammer and transferred £131,010.00 to crypto exchanges and regulated firms between October and November 2025, ultimately losing £93,515.06 after partial recovery. The Ombudsman found Santander liable for failing to maintain visible file notes about the scam concerns and vulnerability, which would have prompted subsequent agents to stop the payments and invoke the Banking Protocol. However, the Ombudsman also found Mr J bore contributory negligence for not being fully transparent with Santander, resulting in an equal liability split and a 50% refund of £46,757.53 plus interest.

The Ombudsman's reasoning

The Ombudsman found that Santander breached their obligations under the Payment Services Regulations 2017, Consumer Duty, and Banking Protocol by: (1) failing to detect the newly opened account during the 10 October call despite Mr J explicitly stating it had been opened; (2) failing to provide education on investment scams and cryptocurrency risks when they knew Mr J was vulnerable; (3) failing to maintain visible file notes about the scam concerns and vulnerability that would have alerted subsequent agents; (4) not implementing adequate fraud detection systems or additional checks before processing payments. The Ombudsman concluded that with proper file notes and education, the scam would likely have been stopped before the first payment, either through Mr J being more forthcoming or through agents becoming suspicious and invoking the Banking Protocol. However, the Ombudsman also found Mr J bore contributory negligence for not being fully open with Santander about the scam despite family warnings, and for not taking sufficient protective steps himself.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website