Not upheld: failure to prevent fraud and inadequate account monitoring complaint against Clydesdale Bank Plc (trading as Virgin Money)

Decision detail

Summary

G, a limited company, complained that Virgin Money failed to protect them from losses when they sent three authorised push payments totalling £85,200 to a fraudulent account after being deceived by a scammer posing as a building supplies business. G argued Virgin should have noticed the unusual account activity and blocked the account to prevent the funds being moved on. The ombudsman found that while Virgin had concerns about the accountholder's attempt to withdraw funds in branch, the account activity itself was not sufficiently unusual or suspicious to warrant earlier blocking. The payment amounts were within expected business turnover, payee names were accurate, and references were consistent with the stated business nature. The ombudsman concluded that Virgin's proportionate response of enquiring without blocking was reasonable, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman considered whether Virgin should have taken earlier action to block the account or ask their customer for further justification before funds were moved. While Virgin had concerns that prompted enquiries, the ombudsman found that the account activity itself was not sufficiently unusual or suspicious to warrant blocking at an earlier stage. The payment amounts were within expected turnover for a business account, payee names were accurate, references were consistent with the business nature, and there were no prior fraud reports. The ombudsman recognised that business accounts have different payment patterns than personal accounts, making it more difficult to identify suspicious transactions. Virgin's proportionate response of enquiring without blocking was reasonable based on the information available at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website