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- 4Ruling
Case 8 of 19 · Level 1
Bank transfers · an investment scam
The broker who stopped answering
The file · about 5 minutes
The complaint
The customer found an investment broker online and was promised a return of at least 10% a year. Over several months they sent four transfers from their bank account: £20,000, two more of £20,000, then £40,000. When the broker stopped responding, they realised it was a scam. They say the bank should have known what was happening.
The firm's answer
The bank says it is not responsible for the loss. It tried to get the money back once it was told, but by then it was too late.
Evidence in the file
Exhibit A · The transfers
Four payments to the broker over several months, £100,000 in all.
Exhibit B · The broker's pitch
A form filled in on the broker's website, then phone calls, and a promised return of at least 10% a year.
What the bank said to the customer at the time
The bank did contact the customer when the payments were made. The customer confirmed they were the one making them, and the bank let them go through.
The broker's regulatory status
The broker was not regulated.
What a bank is expected to do
Background, not from this file: in scam complaints, the ombudsman looks at whether the bank should have spotted payments that looked suspicious, and whether it could and should have stopped the scam. If so, it may ask the bank to refund some or all of the money.
Uphold the complaint, or side with the firm?
The ruling
Given by the ombudsman
Upheld
Why
The bank had spoken to the customer as the payments went out, but it had not asked enough about them. With the right questions, the scam would not have worked. Trying to recover the money afterwards did not make up for failing to prevent the loss.
What the firm had to do
Pay back all £100,000, with interest from when the money was lost until it is repaid.
What an adjudicator takes from this. A check that confirms who is paying is not a check on why. Ask what the bank actually asked.
Rewritten in our own words from a case the ombudsman published.
What is fair and reasonable is a judgement. The ombudsman gives one; people who read the same file often give another, and this game is about how people weigh the same facts, not about being right. Built from cases the Financial Ombudsman Service and other bodies have published, and from Docketory's own files, rewritten in our own words with every name removed. Docketory is not connected with any of them, and this game is not advice on your own case.
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