Not upheld: investment scam - failure to prevent fraud complaint against Lloyds Bank PLC

Decision detail

Summary

X lost approximately £74,080 to an investment scam orchestrated by Person H, who posed as a representative of a fake investment company and convinced X to make 11 payments to an overseas bank and crypto exchange between February and March 2025. The scammer maintained control through frequent calls, device access, and coaching X on what to tell her bank. Lloyds provided written warnings and human interventions at payments 10 and 11, but X insisted her investment was legitimate and no one was helping her. The ombudsman found that while Lloyds should have intervened earlier at payments 5, 8, 9 and 10, it was unlikely such interventions would have prevented the loss given X's conviction in the scam's legitimacy and her willingness to follow the scammer's instructions. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

The ombudsman found that while Lloyds should have implemented human interventions at payments 5, 8, 9 and 10 (rather than only at 10 and 11), the bank was unlikely to have prevented the loss even with earlier interventions. This is because the customer was heavily coached by the scammer, believed the investment was legitimate, was prepared to follow the scammer's instructions over her bank's advice, and had received strong investment scam education. The customer insisted her cover story was genuine when questioned. Even if payments had been blocked, she would likely have found alternative ways to make payments following the scammer's instructions. The ombudsman recognised the customer's distress but found it would be unfair to hold Lloyds liable given the unlikely causation between earlier interventions and prevention of loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website