Not upheld: Fraud reimbursement (APP scams) complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Miss P complained that Halifax failed to protect her from an authorised push payment (APP) scam in which she lost £2,746 total across three payments made to accounts in her own name at money transfer services. She believed the payments should have triggered fraud alerts given the pattern of repeated requests for funds. Halifax declined to refund the losses, citing that the payments were authorised, went to accounts in her name (outside mandatory reimbursement rules), and contained no fraud indicators. The ombudsman found no failing by Halifax, determining that the payment characteristics (low initial values, no rapid succession, legitimate recipient services) did not reasonably warrant intervention, and that banks must balance fraud detection against disruption to legitimate transactions.

The Ombudsman's reasoning

While Miss P was genuinely scammed, the payments were authorised under the Payment Services Regulations 2017 and made to accounts in her own name. The first two payments were low value, none were made in rapid succession, and the third payment, while higher, was not unusually high in context and Miss P had made similar value payments before. The payments were to legitimate money transfer services. Although scammers use multi-stage payment journeys, the nature of these three payments did not reasonably warrant triggering Halifax's anti-fraud systems. Banks must balance their obligation to detect fraud against causing unsustainable disruption to legitimate transactions. No recovery was possible as Miss P had already moved the funds on. The complaint handling concerns fall outside the ombudsman's jurisdiction.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website