Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc trading as first direct

Decision detail

Summary

Mr W lost over £40,000 to an investment scam conducted via social media between August and October 2025, making multiple payments under the fraudster's instructions. First direct partially refunded £5,503.50 but declined to refund the remainder. The ombudsman found that while first direct should have identified unusual payment patterns (increased frequency and multiple new payees) and intervened proportionately, the evidence showed Mr W had been subjected to extensive social engineering and would likely have followed the fraudster's coaching on how to respond to any bank warnings. The applicable regulatory frameworks (CRM Code and Reimbursement Rules) did not apply to these payments, and the ombudsman concluded first direct could not fairly be held responsible for preventing the loss.

The Ombudsman's reasoning

Although Mr W authorised the payments and neither the CRM Code nor Reimbursement Rules apply, good industry practice required first direct to monitor for unusual payments. While the increased frequency and multiple new payees should have prompted intervention, the ombudsman found that even if first direct had intervened with warnings, Mr W would likely have followed the fraudster's instructions on how to respond, given the extensive social engineering and trust he had placed in the scammer. The evidence suggests Mr W would have been prepared to follow the fraudster's advice over the bank's warnings. Therefore, first direct could not fairly be held responsible for preventing the payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website