Not upheld: purchase scam / failure to prevent fraud complaint against Barclays Bank UK PLC

Decision detail

Summary

Mrs K complained that Barclays Bank UK PLC should refund all losses from a purchase scam where she made two debit card payments totalling £1,798 for flight tickets after being deceived at an airport. Barclays initially held Mrs K fully liable but subsequently refunded 50% of the loss and paid £50 compensation, acknowledging the transactions were out of character. The ombudsman did not uphold the complaint, finding that Mrs K authorised the payments under the Payment Service Regulations 2017 by providing her card details, and that the payments were not sufficiently unusual to require Barclays to intervene or conduct additional checks. The ombudsman also found that a chargeback claim would likely have been unsuccessful against the genuine merchant involved.

The Ombudsman's reasoning

The ombudsman applied the Payment Service Regulations 2017, which establish that a payment transaction is authorised when the payer consents to its execution in the agreed form and procedure. Mrs K provided her card details and was aware of the payments and amounts, therefore she authorised the transactions under the PSRs regardless of the deceptive circumstances. The ombudsman then considered whether Barclays should have intervened to prevent fraud, concluding that the two payments totalling £1,798 to a genuine merchant via a legitimate money transfer service were not sufficiently unusual or remarkable to alert Barclays to potential financial harm. The ombudsman noted that banks must balance fraud prevention against processing high volumes of transactions daily, and that a pattern of increasing payments would have changed the analysis. The ombudsman also found that a chargeback claim would likely have been unsuccessful against the genuine merchant.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website