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

Decision detail

Summary

Mr W complained that Lloyds Bank refused to refund a £3,000 transaction he claimed he did not authorize. The transaction was made via the Lloyds banking application at 6:58am and authenticated using Mr W's registered facial recognition biometrics on his registered device. Mr W had allowed unknown third parties access to his phone at a house party while heavily inebriated and claimed they bypassed his biometric security by holding the phone to his face while showing family photos. The ombudsman found the transaction was authorized under the Payment Services Regulations 2017 because the required authentication steps were completed using Mr W's biometrics on his registered device, and rejected Mr W's explanation of how biometrics were bypassed as implausible. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which treat a payment as authorized when the required steps to give consent are completed, focusing on authentication method rather than the payer's physical or emotional state. The evidence showed the transaction was authenticated using Mr W's biometrics on his registered device, satisfying the regulatory requirements. While the ombudsman acknowledged Mr W was heavily inebriated and taken advantage of, the regulatory framework does not provide protection based on intoxication alone. The ombudsman rejected Mr W's explanation that third parties bypassed biometrics by holding the phone to his face while showing photos, finding this implausible given the number of times facial recognition was used and the fact that the Lloyds banking application would have been visible on screen rather than family photos.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website