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

Decision detail

Summary

M, a limited company, was victim of an impersonation scam where €35,000 were transferred to a recipient account held with Sciopay under the false belief it was a legitimate foreign exchange transfer. M complained that Sciopay failed to conduct appropriate identification verification and due diligence when opening the account and failed to adequately monitor it. The ombudsman found that Sciopay carried out appropriate checks in line with regulatory obligations when opening the account, and that prior to the fraud report, the account showed no suspicious activity. The ombudsman concluded that Sciopay reasonably relied on information from its customer and had no objective basis to withhold authorized payments, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Sciopay satisfied its regulatory obligations in opening the account and conducting appropriate due diligence. Prior to the fraud report, there were no signs of suspicious activity, and the dispersal of funds was reasonable and consistent with expected business activity. Sciopay had no objective basis to withhold authorized payments in the absence of fraud reports. The firm's actions did not cause the loss or hinder recovery.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website