Not upheld: refund of losses from blackmail/extortion complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr S was blackmailed after being recorded on an online dating platform and made two card payments totalling £350 to an international money transfer service, which were subsequently sent to the blackmailer. He reported the matter to HSBC the next day and requested a refund. The ombudsman found that although Mr S was a victim of a serious crime, HSBC was not liable because the payments were authorised by Mr S, did not form a suspicious pattern relative to his transaction history, and HSBC had no reasonable grounds to intervene. Additionally, HSBC could not realistically recover the funds once transferred to the blackmailer.

The Ombudsman's reasoning

The ombudsman found that although Mr S was a victim of a serious crime, HSBC cannot be held automatically responsible for all crime victims' losses. The payments were authorised by Mr S (albeit under duress), and under the Payment Services Regulations, he bears liability in the first instance. HSBC had no obligation to intervene as the payments were not of a suspicious pattern, were not unusually large, and HSBC had no awareness of coercion. Additionally, HSBC could not realistically recover the funds once transferred, and no chargeback would have been appropriate as the money transfer service had provided the service as instructed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website