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

Decision detail

Summary

Miss B invested £15,000 in Company O between October 2022 and January 2023 based on advice from Mr K, an independent financial advisor she had known for decades. When she stopped receiving promised returns, she discovered the investment was a scam linked to Mr H, who has since been disqualified as a company director and is under police investigation. Although the ombudsman found Miss B was the victim of an APP scam covered by the CRM Code, the complaint was not upheld because Miss B made the payment without a reasonable basis for believing it was legitimate, given the lack of formal documentation, suspicious payment instructions to a personal account, and unrealistically high promised returns of over 300% annualised.

The Ombudsman's reasoning

The ombudsman found that Miss B was the victim of an APP scam covered by the CRM Code, but that Santander could rely on the exception that the customer made the payment without a reasonable basis for believing the investment was legitimate. Miss B should have been concerned by the lack of formal documentation, the request to pay into a personal account with misleading payment references, and the unrealistically high promised returns of over 300% annualised. Additionally, even if Santander had provided an effective warning about investment scams, Miss B would not have seen it because she indicated during the payment process that she was paying a friend, so the warning would not have materially prevented the scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website