HSBC UK Bank Plc · DRN-6261809

The complaint Mr A has complained that HSBC UK Bank Plc won’t refund the money he lost to a scam. Background. What happened The details of the complaint are well known to both parties, so I will not repeat them again here. Instead, I will focus on giving the reasons for my decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I agree with the Investigator’s findings for broadly the same reasons. I will explain why. In broad terms, the starting position in law is that a bank is expected to process payments that their customer authorises them to make. Here, It isn’t disputed that Mr A knowingly made the payments from his HSBC account – albeit under the direction and guidance of the scammer as he believed the scammer to be legitimate. And so, I’m satisfied he authorised them. Therefore, under the Payment Services Regulations 2017 and the terms of his account, HSBC are expected to process Mr A’s payments, and he is presumed liable for the loss in the first instance. However, taking into account the regulatory rules and guidance, relevant codes of practice and good industry practice, there are circumstances where it might be appropriate for HSBC to take additional steps or make additional checks before processing a payment to help protect customers from the possibility of financial harm from fraud. So, the starting point here is whether the instructions given by Mr A to HSBC (either individually or collectively) were unusual enough to have expected additional checks being carried out before the payments were processed. Keeping this in mind, and having considered the circumstances of this case, I’m satisfied it wouldn’t have been reasonable to expect HSBC systems to have been triggered by the payments in dispute. The payments being disputed here were, individually, of a relatively low value – with £1,000 being the highest. Although Mr A typically used his HSBC account for low value day to day transactions, he’d made payments of a similar or greater value in the prior 12 months. Because of this, I don’t think the individual value of the payments would’ve been seen by HSBC as being unusual or out of character for Mr A. While I accept that the amount of money Mr A sent is clearly significant to him, this doesn’t in itself suggest a heightened risk of fraud. HSBC has a difficult balance to strike in how it configures its systems to detect unusual activity or activity that might otherwise indicate a higher than usual risk of fraud. There are many millions of payments made each day and it would not be possible or reasonable to expect a bank to check each one. As I mentioned

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above, while I don’t doubt the payments represented a lot of money to Mr A, they are of values which I don’t think would have appeared so suspicious or unusual to HSBC, when compared with other payments that it processes daily. Mr A has stated that the transactions were in quick succession as such ought to have looked unusual. However, having reviewed the payments I am aware they were made over a two- day period. And having look at the times the transactions were made, I am not persuaded they would be classified as quick succession. There is often hours between payments, which indicates the payments were not being made under pressure and Mr A had sufficient time to reflect and carry out any research he wished to do between each payment. This doesn’t fit the typical hallmarks of this type of scam to the extent HSBC ought to have been concerned. I have also considered where the payments were made to. Mr A has said that HSBC ought to have identified these payments as unusual or suspicious, as they were going to a well- known cryptocurrency provider. However, while crypto providers are sometimes used for this purpose, they’re also used by many individuals to invest in crypto legitimately. I have also considered that Mr A has made payments to cryptocurrency provider and exchanges previously before, in the six months leading up to the scam. Because of this, I wouldn’t necessarily have expected HSBC to have carried out additional checks before processing the payments simply because they were going to a crypto merchant. But rather, I would expect them to take steps to protect customers that are proportionate to the identifiable risk. I have to bear in mind that if banks such as HSBC were to be expected to intervene with every payment of a similar size to the ones being disputed here it could risk grinding the banking system to a halt. It follows that, while there are circumstances where it might be appropriate for HSBC to take additional steps or make additional checks before processing a payment, for the above reasons, I am satisfied atthe time it was reasonable for HSBC to assume the payments were being made for legitimate purposes. And so, I think it was reasonable for HSBC to process the payments upon receiving Mr A’s instructions. I have gone on to consider if HSBC took reasonable steps to try and recover the funds once Mr A made it aware. As the payments were made by debit card the chargeback process is relevant here. The chargeback scheme is a voluntary agreement between card providers and card issuers who set the scheme rules and is not enforced by law. A chargeback isn’t guaranteed to result in a refund; there needs to be a right to a chargeback under the scheme rules and under those rules the merchant or merchant acquirer can defend a chargeback if it doesn’t agree with the request. We would only expect HSBC to raise a chargeback if it was likely to be successful. Based on the available evidence this does not look like a claim that would have been successful. Consequently, despite my natural empathy for this cruel scam and the situation Mr A finds himself in, I do not consider it fair or reasonable to require HSBC to do anything else. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr A to accept or reject my decision before 28 April 2026. Jade Rowe Ombudsman

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