Partially upheld: investment scam - failure to prevent fraud through inadequate monitoring and warnings complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr J lost £47,494.08 to a crypto investment scam orchestrated via WhatsApp group 'D' between January and March 2025. He made payments to legitimate crypto providers which were then forwarded to the scammers' trading platform. Barclays rejected his scam claim on the basis that payments went to an account in Mr J's own name and were not covered by the CRM code or PSR mandatory reimbursement scheme. The ombudsman upheld the complaint in part, finding that Barclays should have recognised heightened fraud risk and intervened before the £10,000 payment on 11 February 2025, which was significantly larger and unusual compared to Mr J's prior account activity. The ombudsman concluded that proportionate human intervention with probing questions would have uncovered the scam and prevented losses from that date onwards. However, the ombudsman reduced compensation by 50% due to Mr J's contributory negligence in not questioning unrealistic returns, free giveaways, instructions to mislead banks, and lack of written contract. Barclays was directed to pay £22,000 (50% of payments from 11 February 2025 onwards) plus 8% simple interest.

The Ombudsman's reasoning

The ombudsman held that while customers are generally responsible for authorised payments, Barclays had regulatory duties under FCA Principles, SYSC requirements, and good industry practice to monitor accounts for fraud risks, particularly regarding crypto transactions which carry heightened scam risk. By January 2025, banks were aware of multi-stage crypto investment fraud. The £10,000 payment on 11 February 2025 was unusual and out of character for Mr J's account, representing a significant increase from prior transactions. Barclays should have intervened with proportionate human contact to make further enquiries before processing this payment. Had they done so, probing questions would likely have uncovered the scam characteristics (WhatsApp group, unrealistic returns, advice to mislead banks, no written contract). The ombudsman found it fair to hold Barclays responsible for losses from 11 February 2025 onwards despite the funds going to an account in Mr J's own name, as Barclays could have prevented the loss through appropriate intervention. However, Mr J bore 50% responsibility due to contributory negligence: the promised returns were too good to be true, free coin giveaways were suspicious, advice to mislead banks should have raised concerns, lack of written contract was unusual, and information about WhatsApp trading group scams was readily available online.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website