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

Decision detail

Summary

Mr C complained that Santander failed to protect him from an investment scam where he lost money after making two debit card payments to a fraudulent trading account following instructions from scammers on social media. Santander argued the payments were authorized by Mr C and not covered under scam reimbursement codes. The ombudsman found that while banks must monitor for fraud, these particular payments lacked characteristics that would have triggered intervention, were appropriately spaced and decreasing in value, and did not meet the threshold for mandatory additional checks. The complaint was not upheld and no refund was ordered.

The Ombudsman's reasoning

While banks have obligations to monitor for fraud and scams, the two payments in this case did not have characteristics indicative of financial harm. The payments were not of a value that should have triggered further checks, were made a week apart rather than in rapid succession, and decreased in value rather than increased. Although unusual for the account, being uncommon is different from having indicators of possible financial harm. Banks cannot reasonably intervene in every transaction or all those over £100 as this would cause unsustainable disruption to legitimate payments. A chargeback claim would have had no prospect of success as the money reached the customer's trading account and was used by him.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website