Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr J complained that HSBC should refund money he lost to an investment scam. He had made several payments he believed were to a legitimate trading platform, but they were actually sent to scammers. HSBC intervened when payments became unusually large in April 2024, but Mr J provided misleading explanations and ignored fraud warnings. The ombudsman found that while HSBC's intervention was appropriate and proportionate, Mr J's inaccurate disclosures prevented HSBC from providing more targeted warnings. The ombudsman was not persuaded HSBC could have prevented the losses and noted that HSBC had already refunded some payments. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which presume the customer is liable for authorized payments in the first instance. However, banks should intervene when transactions suggest heightened fraud risk. HSBC appropriately intervened when April 2024 payments became unusually large. Although HSBC intervened, Mr J provided misleading information about the payment purposes and wider circumstances, maintaining a consistent false narrative. The ombudsman found that had Mr J disclosed key details (cryptocurrency, multiple accounts, commissions, broker advice, internet source, company name), HSBC could have given more tailored warnings. However, given Mr J's ability to provide plausible explanations and his explicit denials of pressure or third-party involvement, the ombudsman was not persuaded HSBC should have done more or could have prevented the losses. The ombudsman also considered Mr J's claimed vulnerability due to age and divorce but found insufficient evidence that he needed additional support, particularly given his ability to navigate HSBC's fraud checks successfully.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website