Not upheld: Fraud reimbursement (APP scams) complaint against Wise Payments Limited

Decision detail

Summary

Mr C and Ms C lost £13,000 in an investment fraud after making two authorised payments to a company offering returns from assisted living housing projects. The company was registered with Companies House and initially provided promised interest payments before entering administration and being revealed as fraudulent. The customers complained to Wise Payments Limited seeking a refund, arguing the firm should have intervened based on the payment pattern (£50 followed by £12,950 minutes later) and other risk factors. The ombudsman rejected the complaint, finding the payments were not unusual given the customers' previous transaction history, the payment velocity alone did not warrant intervention in context of overall account activity, and there was no evidence the company was known to be fraudulent when the payments were made.

The Ombudsman's reasoning

The ombudsman applied the principle that customers authorise payments and firms must ordinarily execute them, but firms may intervene where circumstances reasonably indicate risk of financial harm. The key issue was whether Wise had sufficient information in August 2024 to require intervention. The ombudsman found the payments were not unusual given the account history of similarly sized payments and property-related transactions. While acknowledging the payment velocity (£50 then £12,950 minutes later), the ombudsman concluded this factor alone, in context of wider account history, did not reasonably require intervention. Even if intervention had occurred, the ombudsman found no evidence the company was known to be operating a scam at that time, so intervention would likely not have prevented the payments. The ombudsman also rejected the argument that Wise should have scrutinised other accounts held by the investment company, as there was no information suggesting wider concerns at that time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website