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

Decision detail

Summary

Miss D complained that Santander failed to refund funds she lost in a cryptocurrency investment scam between February and June 2024. She had been contacted by a scammer via social media who convinced her to invest in cryptocurrency, resulting in significant losses. An FOS Investigator upheld the complaint in part, recommending 50% refund for losses from 3 March 2024 onwards, finding Santander should have intervened at that point. However, the ombudsman overturned this decision, finding that although Santander should have intervened on 3 March 2024, such intervention would not have prevented the losses because Santander had already warned Miss D of the exact scam hallmarks on 18 February 2024, which she ignored. The ombudsman concluded that without causation between the failure to intervene and the loss, Santander could not be held liable.

The Ombudsman's reasoning

The ombudsman applied the legal principle that customers are presumed liable for authorized payments, even if tricked into making them. However, banks should take proportionate steps to prevent fraud. While Santander should have intervened on 3 March 2024, the critical issue was causation: whether such intervention would have prevented the loss. The ombudsman found that Santander's 18 February 2024 call provided clear warnings about the exact hallmarks of the scam Miss D fell victim to (third-party involvement, social media promotion, unrealistic returns, misleading the bank). Because Miss D ignored these specific warnings just two days before engaging with the scammer, the ombudsman concluded that a further intervention on 3 March 2024 would not have resonated with her or prevented the payments. Therefore, Santander could not be held liable for losses it could not have reasonably prevented.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website