HSBC UK Bank Plc · DRN-5924757

The complaint Ms T complains HSBC UK Bank Plc won’t refund all of the money she lost to a scam. What happened The background to this complaint is well-known to both parties, so I won’t repeat it in detail here. But in summary and based on the submissions of both parties, I understand it to be as follows. In April 2024, Ms T met someone who I will refer to as the scammer on a dating website. Between May and July 2024, Ms T made payments totalling over £100,000 to the scammer, on the belief they held a genuine relationship. It was only when the scammer stopped corresponding with Ms T that she realised she had been scammed. Ms T complained to HSBC who looked into the complaint and decided to refund 50% of the losses she had incurred. They said they should have done more to help Ms T uncover the scam, but that she also could have done more to protect herself. Unhappy with HSBC’s response, Ms T brought her complaint to our service. Our Investigator looked into everything but didn’t think HSBC should refund the full amount that Ms T had lost. While they were of the view that HSBC should have intervened from the start, they didn’t feel that any intervention would have worked, as Ms T was so heavily under the spell of the scammer. Because of this, our Investigator didn’t recommend HSBC should reimburse anything more. They were also satisfied that HSBC couldn’t have recovered any of the money either. Ms T didn’t agree and so the complaint has been passed to me for review. 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. I’m aware that I’ve summarised this complaint briefly, in less detail than has been provided, and in my own words. No discourtesy is intended by this. Instead, I’ve focused on what I think is the heart of the matter here. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it, it’s because I’m satisfied I don’t need to comment on every individual point or argument to be able to reach what I think is the right outcome. Our rules allow me to do this as it simply reflects the informal nature of our service as a free alternative to the courts. I can confirm I have considered all guidance and areas of law that are relevant to this case. I don’t doubt Ms T has been the victim of a scam here – she has lost a large sum of money and has my sympathy for this given the circumstances. However, just because a scam has occurred, it does not mean that she is automatically entitled to a full refund from HSBC. It would only be fair for me to tell them to reimburse Ms T for her loss if I thought they

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reasonably ought to have prevented all (or some of) the payments made, or that they hindered the recovery of them. I’ve thought carefully about whether HSBC treated Ms T fairly and reasonably, both when she made the payments and when she reported the scam, or whether they should have done more than they did. Having done so, I’ve decided the 50% offered is fair. I know this will come as a disappointment to Ms T and so I want to explain why I’ve reached the decision I have. I have kept in mind that Ms T made the payments herself and the starting position is that HSBC should follow their customer’s instructions. So, under the Payment Services Regulations 2017 (PSR 2017) she is presumed liable for the loss in the first instance. I appreciate that Ms T didn’t intend for her money to ultimately go to fraudsters – but she did authorise the payments to take place. However, there are some situations when HSBC should have had a closer look at the wider circumstances surrounding a transaction before allowing it to be made. 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 Ms T to HSBC (either individually or collectively) were unusual enough to have expected additional checks to be carried out before the payments were processed. I can see that HSBC’s systems were triggered when some of the payments were made. When asked the reason for the payments that were flagged, Ms T said they were for family support. HSBC have acknowledged that they should have asked more questions about the surrounding circumstances of the payments to determine whether Ms T was falling victim to a scam. And I agree. From what I can see, HSBC didn’t sufficiently probe in their interventions with Ms T, and given the amount of the first payment, the fact it was going overseas and was unusual compared to Ms T’s usual account activity, I believe HSBC should have done more. I can see that money was paid into Ms T’s account and then paid out quickly after – which is common when someone is falling victim to a scam. Ms T also said the payments were being made for family support, but they were being paid into an account with a business name, which I believe should have been questioned further. I have taken into account Ms T’s comments around what HSBC would have known about romance scams at the time the payments were made, and I agree they would most likely have known more than she would have done. However, HSBC need to strike a balance between payments that pose risk, and those that are highly likely to be genuine. Millions of payments are made every day and it wouldn’t be feasible to expect a bank to stop every single one. HSBC have processes in place to spot payments that look suspicious, and they ask questions around what the payments are being made for. They can’t be seen to interrogate a customer and will base their actions and questioning on the answers they are given. I therefore don’t think it is reasonable to suggest they provide information about every type of scam, and things like ‘reverse photo identification,’ if they are being told by a customer that a payment is being made for genuine reasons. Had Ms T told HSBC she was in a new

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relationship and sending money overseas to the person she had met – HSBC would have then had the opportunity to provide warnings around romance scams. Therefore, having considered everything, it is fair that HSBC refund Ms T’s losses from payment one. What I need to consider next is whether it was fair for HSBC to deduct 50% for contributory negligence, something that is looked at separately to the refund I believe is warranted. During her contact with HSBC, Ms T said she was making the payments for family support, showing she wasn’t willing to disclose the true reason for the payments. I can see that Ms T also expressed concern while talking to the scammer but went ahead and made the payments anyway - as they were able to reassure her, by sending photographs and taking part in a video call. Ms T hadn’t ever met the scammer in person though and made large payments to an account not in the scammer’s name, misleading HSBC in the process. From the conversations held, I can see the scammer was advising Ms T on what to say – which she chose to follow. Alongside this I’ve no doubt Ms T felt comfortable following such advice because she had entered into, what she believed, to be legally binding loan agreements which she could enforce if necessary. I do empathise with Ms T though, as scammers can be extremely convincing and they can apply pressure when encouraging someone to make payments. I don’t believe Ms T is at fault here, the scammer is. But I also have to decide whether given everything, it would be fair to say that HSBC have to refund the full amount. Given everything, I think it would be fair to apply some responsibility to Ms T. And I think a 50% reduction to the award based on contributory negligence, in the circumstances of this complaint, is reasonable. I'd like to express that I appreciate Ms T is the innocent victim of a scam here and so I’m not trying to place blame with her. To me, sadly, it seems she was so heavily under the scammer’s spell that she trusted what they were saying and followed their instructions when sending the money. It's a cruel thing for her to have gone through and I would like to extend my deepest sympathy to her. But while such a cruel scam has taken place, it wouldn't be fair for me to say that HSBC should have to pay back all of the money lost, when Ms T didn’t interact with them openly or honestly (albeit due to being under the spell of the scammer). Looking at Ms T’s conversations with the scammer, even if HSBC had intervened further by probing in more depth about the payments she was making and the reasons for them, I simply don’t think they could reasonably have uncovered the scam. Unfortunately, I think Ms T was too heavily under the scammer’s spell and it is therefore most likely that she would’ve proceeded to follow their instructions regardless of the risk that she might lose her money. Consequently, HSBC’s ability to uncover the scam was hindered. Because of this, while I agree HSBC could have done more here, I'm not able to ask them to refund all of the money lost and I believe the 50% refund is fair. I hope my explanation and reasoning have been clear. I'm really sorry Ms T has been through such an ordeal. Recovery After the payments were made, I couldn’t reasonably expect HSBC to have done anything further until Ms T told them she had been scammed.

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I can see that HSBC tried to recall the funds, however, they were notified that the recall was unsuccessful. Because of the above, while I can see they tried, I’m satisfied HSBC could not have successfully recovered any of Ms T’s funds. The Contingent Reimbursement Model (CRM) Code Ms T has said the payments made were caught by the CRM code, however the Code does not apply in this instance. This is because the payments Ms T made were international payments which are not covered. So, I cannot reasonably say HSBC have to refund any payments under the Code when it does not apply here. My final decision My final decision is that the offer made by HSBC UK Bank Plc is a fair one and so I won’t be asking them to increase it. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms T to accept or reject my decision before 20 April 2026. Danielle Padden Ombudsman

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