Partially upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank PLC

Decision detail

Summary

Mr and Mrs P lost £21,928 to a recovery scam after being contacted about recovering funds from a previous investment scam. They made two payments to a cryptocurrency account in August 2023. The ombudsman found that HSBC should have intervened on the second payment (£17,800) as it was sufficiently out of character: it was large, followed a large deposit made the same day, was paid to an EMI account, and drained the account into overdraft—all unusual for this account and consistent with known fraud patterns. The ombudsman concluded that intervention would likely have uncovered the scam through basic questioning. However, Mr and Mrs P were found 50% responsible as they should have been more cautious given their awareness of recovery scams. HSBC was ordered to pay £8,900 plus interest.

The Ombudsman's reasoning

The ombudsman found that while HSBC is expected to process authorised payments, it should have been on the lookout for Authorised Push Payment scams and intervened proportionately when there were clear indications of risk. The second payment was sufficiently out of character due to the combination of: a large payment (£17,800), a large deposit made the same day and paid out quickly, the payment being to an EMI account, the account being drained and taken into overdraft (unusual for this account), and the pattern matching known fraud schemes. The ombudsman concluded that human intervention by telephone would have been appropriate and likely would have uncovered the scam through basic questioning. However, Mr and Mrs P bore some responsibility as they should have been more cautious given their awareness of recovery scams and the warning signs present.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website