Not upheld: scam - payment misdirection by third party; failure to intervene on international money transfer complaint against Barclays Bank UK PLC

Decision detail

Summary

Miss O lost approximately £20,000 to a scam involving a surgeon's assistant (Dr S) who misdirected her international money transfer payments for overseas surgery to himself rather than the legitimate clinic. She complained to Barclays, which rejected her claim on the basis that debit card payments are not covered by the CRM code or PSR mandatory reimbursement scheme. The ombudsman found that while Barclays should have intervened with warnings before processing large international transfers, such intervention would not have uncovered the fraud because Miss O had legitimately corresponded with a genuine clinic for months and had no reason to suspect Dr S's fraudulent conduct. The complaint was not upheld as causation could not be established between Barclays' failure to intervene and the loss.

The Ombudsman's reasoning

While Barclays should have intervened with an automated warning before processing larger payments due to known fraud risks with international money transfers, the ombudsman found that such a proportionate intervention would not have uncovered the scam. Miss O had legitimately corresponded with a genuine clinic for months, undergone required medical procedures, and had no reason to suspect Dr S was acting fraudulently. Even if warned, she would likely have contacted Dr S directly to verify payment details, which would not have revealed the fraud. Therefore, causation was not established - Barclays' failure to intervene would not have prevented the loss. Additionally, chargeback recovery would have been unsuccessful as the money transfer provider had provided the service paid for.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website