Not upheld: Fraud reimbursement (APP scams) complaint against Modulr FS Limited (trading as Pockit)

Decision detail

Summary

Miss D opened a Pockit account and was contacted by a scammer impersonating a Student Finance England representative who convinced her they could help obtain additional funding. The scammer gained access to her account and made over £3,400 in unauthorised payments between 25 September and 7 October 2025, which Miss D believed were temporary verification transactions. When Miss D discovered the scam on 13 October 2025, she requested a refund from Pockit, which was declined. The ombudsman found the payments were authorised because Miss D had provided account details, verification codes, and approved magic links, thereby giving the scammer permission to make transactions on her behalf. Although recognising Miss D's vulnerability and the scammer's manipulation, the ombudsman concluded that the Payment Services Regulations do not provide an exception based on deception and that proportionate intervention would not have likely prevented the losses given Miss D's trust in the scammer.

The Ombudsman's reasoning

The ombudsman found that Miss D authorised the payments under the Payment Services Regulations 2017 because she provided account details, verification codes, and approved magic links, giving the scammer permission to make payments on her behalf. Although Miss D was deceived and vulnerable, the PSRs do not provide an exception based on deception or vulnerability. Even if Pockit should have intervened, the ombudsman was not persuaded that proportionate intervention (such as asking for a payment reason) would have prevented the losses, given the extent to which Miss D trusted the scammer and was prepared to follow their instructions without meaningful challenge. Recovery efforts were unlikely to succeed given the time delay before reporting and the nature of the payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website