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

Decision detail

Summary

Mr M lost over £22,000 in a cryptocurrency investment scam after making six payments from his Santander account between April and September 2022. The scheme was recommended by his friend who was a financial adviser and appeared legitimate, with positive reviews and standard investment terms. Santander intervened multiple times with warnings and phone calls, and blocked his account, but Mr M proceeded regardless. The ombudsman found that while Santander's intervention could have been stronger, it would not likely have prevented the loss given Mr M's trust in his adviser, his own research, and the scheme's apparent legitimacy at the time. The complaint was not upheld as Santander could not reasonably have uncovered the scam when regulators and qualified parties had not.

The Ombudsman's reasoning

The ombudsman found that while Mr M authorised the payments and is liable in the first instance under Payment Services Regulations, Santander should have intervened on at least the £10,000 payment. However, even assuming Santander's intervention was insufficient, the ombudsman concluded that reasonable intervention would not likely have stopped the loss because: (1) Mr M had strong trust in his financial adviser friend who had previously invested successfully; (2) Mr M had conducted his own research and found positive reviews; (3) the scheme appeared legitimate with standard terms and no guaranteed returns; (4) regulators and qualified parties had not yet uncovered the scam; and (5) Mr M proceeded despite multiple warnings and account blocking, indicating he would likely have continued regardless. The ombudsman found it would be too speculative to conclude that Santander could have uncovered the scam when others had not.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website