Not upheld: investment scam - refusal to reimburse losses complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Ms N lost over £14,000 to an investment scam involving firm S, which encouraged her to invest via trading platform T. She made several payments from her NatWest account to her own trading account with T, where she purchased shares that subsequently plummeted in value. NatWest declined her scam claim, arguing payments went to her own account with a legitimate platform. The Ombudsman found NatWest not liable, determining that the payment amounts were not remarkably unusual, Ms N would have provided honest explanations if questioned, and the circumstances would not have revealed fraud to a reasonable bank. Ms N's vulnerability and overdraft usage were not known to NatWest and did not trigger intervention obligations.

The Ombudsman's reasoning

The Ombudsman found that while NatWest should reasonably look out for transactions indicating fraud risk and intervene where appropriate, the £5,000 payment was not remarkably higher than other payments on the account in the preceding year. Even if NatWest had intervened, Ms N would have honestly explained she was paying her own legitimate trading account to buy real shares, making it very difficult for NatWest to identify anything suspicious. The features resembling investment scams (group chat, investment encouragement) were insufficient to warrant concern, and pump and dump schemes were not so well-known that NatWest should have warned about them. Ms N's vulnerability was not known to NatWest, and her overdraft usage remained within agreed limits. The payments were not covered by reimbursement rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website