Partially upheld: scam/fraud - inadequate intervention and fraud prevention measures complaint against HSBC UK Bank Plc

Decision detail

Summary

Mrs R lost £61,050 to a crypto investment scam orchestrated by firm X, whom she encountered on social media. She made six payments totalling £11,550 to a crypto exchange via HSBC, and six payments totalling £54,510 to an EMI provider, with funds forwarded to the scammer. HSBC carried out intervention calls but the ombudsman found these were insufficiently robust given the fraud risk indicators present from the third payment onwards. The ombudsman upheld the complaint in part, finding HSBC should have conducted more effective fraud prevention checks and that an appropriate intervention would likely have prevented the losses. However, Mrs R was found 50% contributorily negligent for providing inaccurate information, ignoring warnings, and failing to adequately verify the investment opportunity. HSBC was directed to refund £29,600 (50% of preventable losses) plus 8% simple interest.

The Ombudsman's reasoning

The ombudsman found that while Mrs R authorised the payments, HSBC should have taken additional proportionate steps before processing the third payment (£2,200) onwards given the fraud risk indicators: multiple payments to a crypto provider in rapid succession, social media origin, and involvement of an investment firm. HSBC's checks were insufficient - they should have probed further, challenged Mrs R more robustly, and highlighted common crypto investment scam features. An effective intervention at the £2,200 payment stage would likely have prevented the losses, as Mrs R would not have been financially invested or manipulated into believing in false profits. However, Mrs R bore 50% contributory negligence for: providing inaccurate information to HSBC and R; ignoring relevant scam warnings; investing significant funds with a social media-sourced firm without adequate checks; failing to question X's lack of online presence; and continuing payments despite R's fraud restrictions. The ombudsman considered Mrs R's actions showed lack of care beyond what a reasonable person would exercise.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website