Not upheld: Investment mis-selling complaint against TSB Bank plc

Decision detail

Summary

Mr and Mrs T complained that TSB refused to refund £284,000 they lost through an alleged investment scam with an individual called X, a family friend, from October 2019 to December 2024. Although Mr T received over £218,000 in credits and X provided professional documentation, Mr T eventually discovered the investment was fraudulent when other investors and bankruptcy procedures emerged. The ombudsman did not uphold the complaint, finding the circumstances did not meet the FCA definition of an APP scam, particularly given the five-year duration, substantial credits returned, and involvement of an FCA-registered company. Additionally, even if a scam had occurred, TSB would not have reasonably intervened based on Mr T's explanation of the investment arrangement.

The Ombudsman's reasoning

The ombudsman applied the FCA definition of APP scams and found the circumstances did not meet the threshold. The key factors distinguishing this from a typical scam were: the investment continued over five years with substantial credits returned (unusual for scams), funds were invested with an FCA-registered company, and the scammer (X) is still dealing with the situation through an IVA. Even if a scam had occurred, TSB would not have reasonably intervened as Mr T's explanation of investing with a family friend receiving regular credits would not have raised concerns.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website