Financial Ombudsman sided with the bank

slingo63

Last August (2024) I fell victim to an authorised push payment scam which involved four payments. The bank have refunded three of them totalling £7300, but are refusing to refund the first one of £2000 on the basis that I authorised it in the app. I went to the ombudsman and they said the same thing. However, I only did it after asking the caller to prove he was from the bank and I got a text message identical to the ones I get from the bank even appearing to be from the same short code number the bank uses, so I was convinced he was from the bank. Is there nothing I can do to try and recover my remaining £2000? It just seems that the more convincing the scam, the less chance you've got of getting it back, although I know the rules changed in October. I hope someone can help.

eskbanker

Text messages can be spoofed, so shouldn't be relied on - if you want to validate contact from a bank you need to phone them on the number published on their website or the back of your card.

Obviously there will have been plenty of detailed data in front of FOS in order for them to reach a decision, so impossible to take a view about whether or not it was the right one or not from what you've shared here, but if it's simply an adjudicator who's issued their findings, you do have the option of escalating to an actual ombudsman for a final binding decision.

After that you could potentially try court but if you were unable to convince the ombudsman then I wouldn't hold out much hope of persuading a judge....

Edit: just to add, the whole point of the APP scam code was that it covered transactions that were authorised, so the bank can't refuse simply because you authorised a transaction, they'd need to demonstrate that, for example, you acted negligently or ignored effective warnings, etc.

slingo63

This is what they said: 

"The relevant section of the PSRs says that a payment will be considered as authorised if the accountholder has completed the agreed form and procedure for making a payment, or if they’ve given a third party consent to complete the form and procedure on their behalf. 

I’ve seen from Starling’s terms and conditions that when an accountholder approves a payment in the app, Starling will take this as the accountholder’s confirmation that they’re authorising Starling to process the payment.  

Mr Singleton said he shared his card details with the scammer, and he authorised the payment in the Starling app. He was aware of the amount of the payment, and he knew it would be leaving the account, although Mr Singleton thought the payment would be going to a new account. I’ve seen from Starling’s 3DS approval screen flow that it would have been clear on the screen that Starling viewed the payment as high risk, and Mr Singleton would have been presented with a scam warning. It would have been clear that this step was for Mr Singleton to confirm the specific payment leaving the account.   

Whilst I appreciate Mr Singleton approved the payment for a different reason, the payment authorisation requirements of the PSRs have been met, so for this reason I find the payment to be authorised, and therefore in line with the PSR's, the starting point is that Mr Singleton is liable for it."

I'm not disputing that I authorised the transaction, and I did read the scam warning on the app, but as I was obviously under the illusion I was speaking to an employee of the bank I proceeded. They say the money would have been used to purchase goods or services which I have not received but are unable to provide me with the merchants details to try to claim against them. I thought that the bank would try to recover the funds from the receiving bank but this is obviously not the case.

I will say I'm not happy with the decision but I just wondered if there was any other avenue I could go down to try and recover the money.

eskbanker

slingo63 said:

Mr Singleton said he shared his card details with the scammer, and he authorised the payment in the Starling app.

Ah - I hadn't appreciated that it was a debit card payment, which unfortunately disqualifies any claim under the authorised push payment provisions, as these only cover bank transfers.  Card payments do have protection from chargeback, e.g. for goods/services not received, but only within 120 days, so too late to go down that route now.

masonic

How long after the debit card transaction did you report it to Starling as a scam? It does seem odd that they didn't attempt a chargeback. Or perhaps they did but it was challenged.

TheBanker

masonic said:

How long after the debit card transaction did you report it to Starling as a scam? It does seem odd that they didn't attempt a chargeback. Or perhaps they did but it was challenged.

Chargebacks often don't work where someone's been scammed into making a payment. The cardholder has authorised the payment, the merchant will have released goods to the fraudster. They haven't breached their contract so there are no real grounds for a chargeback. You see this quite often in FOS decisions where the victim has been tricked into buying Crypto for the fraudster - the Crypto exchange has fulfilled their contract by supplying Crypto currency to the fraudster in line with the cardholder's request.

Sadly as banks have tightened their monitoring of Faster Payments due to the new reimbursement rules, scams using card payments are becoming more common.

Uriziel

What could someone "from the bank" possibly have told you to convince you to pay the bank money..? Why would a bank call you to ask for money?
Santander has branches all over the place, I'm not sure why you did not just head to the nearest branch instantly asking them why they are demanding £9400 from you. I not only get spammed by banks but also several notifications all the time that they will not call me and ask for money and that you should never transfer money to anyone because they ask for it on the phone. Just be happy that you got most of it back and move on. Banks seriously are doing all they can to stop this from happening. I can barely move a penny without being asked to make a VLOG.

masonic

Uriziel said:

What could someone "from the bank" possibly have told you to convince you to pay the bank money..? Why would a bank call you to ask for money?
Santander has branches all over the place, I'm not sure why you did not just head to the nearest branch instantly asking them why they are demanding £9400 from you. I not only get spammed by banks but also several notifications all the time that they will not call me and ask for money and that you should never transfer money to anyone because they ask for it on the phone. Just be happy that you got most of it back and move on. Banks seriously are doing all they can to stop this from happening. I can barely move a penny without being asked to make a VLOG.

Why would Santander have anything to do with a debit card transaction from a Starling account? Starling doesn't have any branches.