Not upheld: Fraud reimbursement (APP scams) complaint against Marks and Spencer Financial Services PLC (trading as M&S Bank)

Decision detail

Summary

Mr S complained that M&S Bank wrongfully held him liable for a £10,000 loan he did not consent to, claiming he was a victim of a scam where a scammer coached him through the application process. M&S had conducted affordability and creditworthiness checks, verified Mr S's income, and obtained confirmation during a verification call that he was not being forced and intended to use the funds for home improvements. The ombudsman found that Mr S had authorized the application using his genuine details and that M&S had no reasonable basis to suspect fraud at the time of approval. The complaint was not upheld, though the ombudsman recommended M&S consider a reasonable repayment plan given Mr S's difficult circumstances.

The Ombudsman's reasoning

The ombudsman determined that Mr S authorized the loan application himself by providing genuine personal details and confirming his intentions during M&S's verification call, even though he was coached by a scammer. Under consumer credit legislation, a customer can only avoid liability if the loan was taken out by an unauthorized party. M&S conducted proportionate affordability checks appropriate to the loan value and found no concerns based on Mr S's declared income and credit history. The ombudsman found M&S had no reasonable basis to suspect fraud or investigate further, and therefore acted fairly in approving the loan and pursuing repayment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website