Not upheld: scam and fraud - refusal to refund complaint against Lloyds Bank PLC

Decision detail

Summary

Mr B fell victim to an investment scam and made 9 transfer payments totalling £97,000 from his Lloyds account to another account in his own name. Lloyds intervened on multiple occasions by calling Mr B about the large payments, but Mr B provided false information stating the payments were for home improvements and no third party was involved. The ombudsman found that Mr B deliberately misled Lloyds to facilitate the payments and would not have provided honest responses even with further intervention, so Lloyds could not have prevented the scam. The complaint was not upheld.

The Ombudsman's reasoning

Although Mr B authorised the payments, banks have a duty to protect against fraud and conduct due diligence on large transactions. Lloyds did intervene on multiple occasions, but Mr B deliberately provided false information to facilitate the payments. The ombudsman found that even if Lloyds should have intervened further, Mr B would not have provided honest responses, so Lloyds could not have prevented the scam. Mr B's claim of vulnerability was not substantiated with evidence that he was unable to make sound financial decisions or that Lloyds was aware of such vulnerability.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website