Not upheld: scam loss / fraud reimbursement complaint against Santander UK Plc

Decision detail

Summary

Mrs B complained that Santander should refund £12,625 she lost to a scam in which she was manipulated by fraudsters posing as police officers into purchasing gold bars. Santander declined to refund the money, stating it had carried out appropriate security and scam prevention conversations before the payment was made. The ombudsman found the complaint not upheld because Mrs B authorised the payment to a legitimate jeweller (and received the gold), the PSR Reimbursement Rules did not apply, and Santander's fraud prevention measures were proportionate and adequate. Although Santander intervened and questioned Mr and Mrs B about the payment, they provided false information denying they had been asked to hide the payment's purpose or move money as part of an investigation. The ombudsman concluded that stricter action by Santander would not have prevented the loss, as Mrs B found alternative ways to make payments through other organisations.

The Ombudsman's reasoning

The ombudsman applied the legal starting position that firms must process authorised payments. Although Mrs B did not intend the money to reach scammers, she authorised the payment to a legitimate jeweller and received the gold as purchased. The PSR Reimbursement Rules do not apply because the payment was made to a legitimate merchant, not directly to scammers. Santander's fraud prevention measures were proportionate: it intervened, temporarily stopped payments, and conducted multiple conversations asking about fraud and scams. When questioned, Mr and Mrs B provided false or incomplete information, denying they had been asked to hide the payment's purpose or move money as part of an investigation. The ombudsman concluded that even if Santander had asked further questions, Mrs B would likely not have provided accurate information, and based on what Santander was told, it was reasonable not to prevent the payment entirely. The fact that Mrs B found alternative ways to make payments (through other organisations) suggests that blocking this payment would not have prevented her loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website