Not upheld: scam protection - cryptocurrency investment fraud complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr and Mrs L complained that Barclays Bank UK PLC failed to protect them from a cryptocurrency investment scam, resulting in a net loss of £10,430 from their joint account between November and December 2024. Mr L was deceived by a fraudulent investment platform with a professional appearance and positive reviews, and was guided by scammers through the process of setting up cryptocurrency accounts and making multiple rapid payments. The ombudsman found that while Barclays should have asked targeted questions and provided tailored warnings about cryptocurrency investment scams on certain payments, it was unlikely such warnings would have prevented the loss, particularly given that Mr L subsequently proceeded with a similar payment despite an explicit warning from another bank that there was a 'very high chance' of scam. The complaint was not upheld, and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman acknowledged that Barclays should have asked targeted automated questions and provided tailored warnings about cryptocurrency investment scams when Mr L made payments 2 and 4, as these payments were unusually large, rapid, and out of keeping with his normal account activity. However, the ombudsman found that the critical issue was whether such warnings would have prevented the loss. The ombudsman noted that Mr L had demonstrated a willingness to proceed with cryptocurrency investments despite explicit and stark warnings from bank R, which specifically warned of a 'very high chance' of scam. The ombudsman found it unlikely that Mr L would have answered Barclays' questions truthfully (given his misleading answers to R) or that automated warnings would have deterred him. Even if Barclays had conducted phone interviews similar to R's, the ombudsman saw no reason to believe Mr L would have answered differently or changed his behaviour. The ombudsman also found that Barclays could not have recovered the funds, as they were legitimately transferred through cryptocurrency platforms to accounts under the scammer's control.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website