Bank of Scotland plc trading as Halifax · DRN-5934212

The complaint Ms P complains that Bank of Scotland plc trading as Halifax won’t fully reimburse money she lost as a result of a scam. What happened Ms P was in the process of purchasing a property. Emails between her and her solicitor were intercepted by a fraudster. The fraudster directed her to pay an account they controlled. Over the course of five days in May 2025, Ms P made six payments to that account totalling £110,000. When her solicitor notified Ms P that she hadn’t received any money, Ms P reported the matter to Halifax as a scam. It reimbursed £84,900 under the provisions of the FPS Reimbursement Rules (“the Reimbursement Rules”) which requires payment services providers, like Halifax, to reimburse APP scam victims in all but limited circumstances. The Reimbursement Rules have a maximum reimbursement level of £85,000 and an allowable excess of £100. It declined to fully reimburse her (though it did accidentally credit her account with in excess of the full amount, before removing those funds). Halifax acknowledged its customer service errors, including the accidental overpayment and paid Ms P £250 compensation to reflect that. Ms P referred a complaint to our service and one of our investigators upheld it. They thought that, outside of the Reimbursement Rules, Halifax should have considered that the first payment Ms P made was unusual and out of character and contacted her before allowing it to take place. Had they done that, the investigator argued, the scam would have come to light and Ms P’s loss would have been prevented. Ms P accepted our investigator’s recommendation, but Halifax did not. In summary, it said: - When the full 12 months prior to the disputed transactions were considered, the first payment of £10,000 was not unusually high in value. Ms P had made a larger payment in November 2024. So it disagreed that a human intervention was required. - It did provide written warnings to Ms P in advance of two of the payments. She indicated that the payments were for “A house deposit” and she received a warning which included an instruction to call her solicitor to check the account details and a warning that she could lose her money if she didn’t do this. - It hadn’t been provided with the entire chain of emails between Ms P and her solicitor and it believes that it’s likely that the solicitor would have also warned Ms P about exactly this sort of scam. As no agreement could be reached, the complaint was passed to me for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. I’m satisfied that Halifax has acted fairly under the Reimbursement Rules by providing Ms P with the maximum amount of reimbursement minus the allowable excess. However, I think that Halifax should have also been monitoring Ms P’s account activity for indications that she was at risk of financial harm from fraud and, where appropriate, it should have intervened before a payment in a way that is proportionate to the risk the payment presented. On that basis, I think that Halifax could and should have prevented Ms P’s loss from the first payment. I explain my reasons below. - Ms P used two different accounts to make the disputed payments – a savings account and an ISA. I’ve reviewed the activity across those accounts, as well as Ms P’s current account and I do think that the first payment of £10,000 (which debited her savings account) stuck out as being unusual. That appears to be the only payment that wasn’t a transfer between Ms P’s accounts during the 12 months prior to the scam. It was a large payment and being made to a new payee. - Halifax have argued that a single payment of approximately £16,000 which debited Ms P’s current account is evidence that the payments in dispute weren’t unusual. But I don’t think it’s fair to conclude that a single payment, to a well-known company, more than six months before the scam, on a different account, means that the first disputed payment represents typical account activity. There were no other payments on the current account that were comparable in size to the first payment in dispute during that period either. - Given the size of this payment and the other factors I’ve mentioned, I think that it would have been proportionate for Halifax to have contacted Ms P to discuss the circumstances surrounding it before allowing the payment to go ahead. - Halifax hasn’t provided direct evidence that it displayed a relevant warning to Ms P and she doesn’t think it did. Even if it did provide the warnings it claims to have shown, I don’t think either warning explains what the risk is – that an email can be intercepted, and fraudsters can substitute genuine account details for fraudulent ones. So, I don’t think the warnings were sufficient in the circumstances. - A human intervention, on the other hand, would have been able to identify two crucial facts: the payee had no obvious relation to the solicitor and the account details had only been communicated over email. With this knowledge I’d expect Halifax to insist that the solicitor was called before making the payment and I think this action would have brought the scam to light (as it did later). - It follows that Halifax should have prevented the scam from the first payment. I’ve also thought about Ms P’s role in what happened and whether she should be held partly responsible for her loss. Having done so, I don’t think there should be any deduction from the amount reimbursed for the following reasons: i) I’ve reviewed the emails that Ms P received. It appears that the emails did come from the actual solicitor’s email address but there was an autoreply set up so that any responses were sent to an email address controlled by the fraudster. I think this would have made it very difficult for Ms P to detect the fraud, particularly as there were no obvious errors in the content of the emails. ii) There’s also no evidence that the genuine solicitor’s email contained a warning about the provision of account details. iii) The request to send money was obviously not unexpected – Ms P was expecting to make the payments as part of her property purchase.

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iv) As I’ve explained, even accepting that Ms P received the warnings Halifax claim she did, those warnings didn’t explain the specific risk and I don’t think Ms P had any significant reason to think that she wasn’t talking to the genuine solicitor. - Ms P has also asked me to consider the fact that Halifax initially reimbursed the full amount, before removing some of those funds. I can imagine how disappointing and upsetting this would have been – given the amount involved and the circumstances. I can also understand that Ms P had to unnecessarily contact Halifax on a number of occasions. However, I note that Halifax has paid £250 in compensation to reflect these errors and I feel that this is fair in the circumstances. My overall findings mean that Halifax should reimburse Ms P her outstanding loss. It should also pay 8% simple interest per year on that amount from the date of each payment to the date of settlement. My final decision I uphold this complaint about Bank of Scotland plc and instruct it to pay Ms P: - Her outstanding loss – which I calculate to be £25,100 - 8% simple interest per year on that amount from the date of each payment to the date of settlement, less any tax lawfully deductible. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms P to accept or reject my decision before 28 April 2026. Rich Drury Ombudsman

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