Not upheld: Fraud reimbursement (APP scams) complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs M lost £24,500 to an investment scam between February and March 2020, making 19 payments to a business that appeared to be legitimately regulated by the Cyprus Securities and Exchange Commission. She did not report the matter to Lloyds until August 2025. The ombudsman found that while Lloyds should have intervened by the third payment due to an unusual payment pattern, any intervention would not have prevented the loss because the business appeared legitimate at the time, no adverse regulatory information was publicly available until May-June 2020 (nearly three months later), and Mrs M had misrepresented her trading experience to the business, suggesting she would have been untruthful with Lloyds as well. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Lloyds should have intervened by the third payment on 26 February 2020 due to the unusual payment pattern, any intervention would not have prevented Mrs M's loss. This is because: (1) at the time of the payments, the business appeared to be legitimate and was apparently regulated by the Cyprus Securities and Exchange Commission; (2) no adverse regulatory information was publicly available until May-June 2020, nearly three months after Mrs M's payments; (3) even if Lloyds had questioned Mrs M or directed her to the FCA website, she would not have found any negative information; and (4) Mrs M had misrepresented her trading experience to the business, suggesting she would likely have been untruthful with Lloyds as well, preventing Lloyds from discovering the scam. The ombudsman concluded the loss was caused by the fraudulent business, not by any failing of Lloyds.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website