Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss S lost £16,925 to an investment scam between September and December 2025, making five payments she believed were for legitimate investment purposes. HSBC intervened before processing the final three payments and spoke with Miss S by phone, during which she provided false reasons (dog purchases and kitchen renovation) rather than disclosing the investment purpose. The ombudsman found HSBC's interventions were proportionate and that although HSBC could have questioned the inconsistency between a local builder and international payment, Miss S would likely have adapted her false story as she had already anticipated this issue. The complaint was not upheld as HSBC could not have reasonably prevented the scam.

The Ombudsman's reasoning

The ombudsman applied the legal starting position that customers are presumed liable for authorised payments, even if tricked into making them. While banks should take proactive steps to prevent fraud, there is a balance to be struck. HSBC's interventions on the final three payments were proportionate given the values and international destination. Although HSBC should have probed why a local builder required an international payment, the ombudsman found Miss S would likely have adapted her cover story (as she had already prepared for this issue) and continued to be dishonest, so the scam would not have been uncovered. No chargeback would have succeeded as Miss S authorised the payments and likely received goods/services. Recovery attempts were unsuccessful.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website