HSBC UK Bank Plc · DRN-6216715

The complaint Mrs I complains that HSBC UK Bank Plc has not refunded the money she has lost as the result of a scam. Mrs I is represented in this matter, but for ease of reading I will refer to Mrs I throughout this decision. What happened The background to this complaint is well known to all parties so I will not set it out in detail here. In summary, Mrs I says that in mid-2024 she was contacted by representatives from a company claiming to have legal expertise. She was told they could recover money she had previously lost in a cryptocurrency scam in 2020. Over a period of five and a half months Mrs I transferred over £83,000 in 30 transactions from her HSBC account. The scammers coached Mrs I in setting up an account with a cryptocurrency platform and a separate account with a financial technology business. The money Mrs I transferred on to the scammers, from the platforms, was shown as being received by the company in her ‘account’ on a fake online portal. Mrs I has explained she took steps to verify the company she was dealing with by reviewing their website and online presence. The scammers persuaded Mrs I to keep transferring money by telling her payments were needed to pay tax, fund anti-money laundering checks and to meet ‘liquidity requirements’. Mrs I realised she was being scammed when, despite making the payments requested, she did not receive any money back. HSBC did not uphold Mrs I’s complaint. It said it was sympathetic to her position and it accepted that she had fallen victim to a scam. But it noted it had spoken to Mrs I several times about the payments she was making. Unfortunately, as Mrs I had not answered its questions truthfully it said it had been unable to uncover the scam. Our investigator said they didn’t think Mrs I’s complaint should be upheld. They noted HSBC had intervened several times, but Mrs I had not been honest when she was asked about the payments and why she was making them. Mrs I did not accept our investigator’s view. She said, in summary that HSBC should have blocked all payments after it spoke to her about the payment she made on 24 July 2024 for £2,500. Mrs I said it was not her ‘…fault that she did not pause or reconsider after hearing only a brief warning, delivered without proper explanation or examples’. She said the scam continued due to ‘….HSBC’s lack of meaningful effort and failure to provide a reasonable, proportionate response’. She also said HSBC should have asked for evidence when she incorrectly told branch staff she was using the money to buy a property overseas. Mrs I said there was no evidence she ‘…would have ignored a clear, firm warning if one had been provided.’

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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 have reached the same view as our investigator, and for much the same reasons. I’ll explain why. 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. 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. This simply reflects the informal nature of our service as a free alternative to the courts. I don’t doubt Mrs I has been the victim of a scam here – she has lost a large sum of money and has my sympathy for this. However, just because a scam has occurred, it does not mean she is automatically entitled to recompense by HSBC. It would only be fair for me to tell HSBC to reimburse Mrs I for her loss (or a proportion of it) if: I thought HSBC reasonably ought to have prevented all (or some of) the payments Mrs I made, or HSBC hindered the recovery of the payments Mrs I made – whilst ultimately being satisfied that such an outcome was fair and reasonable for me to reach. I have kept in mind that Mrs I made the payments herself and the starting position is that HSBC should follow its customer’s instructions. So, under the Payment Services Regulations 2017 she is presumed liable for the loss in the first instance. I appreciate that Mrs I did not intend for her money to ultimately go to a scammer – but she did authorise these payments to take place. However, there are some situations when a bank should have had a closer look at the wider circumstances surrounding a transaction before allowing it to be made. Considering the relevant: law and regulations; regulators’ rules, guidance and standards; codes of practice; and, where appropriate, what I consider to be good industry practice at the time – HSBC should fairly and reasonably: • Have been monitoring accounts to counter various risks, including preventing fraud and scams. • Have had systems in place to look out for unusual transactions or other signs that might indicate that its customers were at risk of fraud (among other things). This is particularly so given the increase in sophisticated fraud and scams in recent years, which payment service providers are generally more familiar with than the average customer. • In some circumstances, take additional steps, or make additional checks, before processing a payment, or in some cases decline it altogether, to help protect customers from the possibility of financial harm from fraud. • Have acted to avoid causing foreseeable harm to customers, for example by maintaining adequate systems to detect and prevent scams and by ensuring all aspects of its products, including the contractual terms, enabled it to do so. So, I’ve thought about whether the transactions should have highlighted to HSBC that Mrs I might be at a heightened risk of financial harm due to fraud or a scam.

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As our investigator noted, the first four transactions were made to the same cryptocurrency exchange. There was a gap of nearly two weeks between the first payment of £269 on 9 July 2024 and the second payment of £2,238 on 22 July 2024. Mrs I then made a payment of £2,500 on 23 July and again on 24 July 2024. HSBC intervened on the fourth payment on 24 July 2024. It spoke to Mrs I about the payment she wanted to make. I think it was appropriate for HSBC to have intervened before processing this payment. It was the third payment in as many days to the same payee and a pattern of frequent payments was emerging. Mrs I says she doesn’t think this intervention was adequate and she was not at ‘…fault that she did not pause or reconsider after hearing only a brief warning, delivered without proper explanation or examples.’ During the conversation, which I have listened to carefully, Mrs I told HSBC she had to pay tax before she could withdraw her money. The representative explained that Mrs I could ‘be sure it’s a scam’ if she was being asked to make a payment before she could withdraw her money. Mrs I disputed this and the representative noted that the payee was classed as high risk and HSBC had seen a number of cases where customers had been scammed in circumstances very similar to those Mrs I had described. The representative reiterated that there was a ‘very high risk of [this] turning out to be a scam.’ The payment was not processed and Mrs I was directed to on-line scam education. Despite this Mrs I resubmitted the payment later that day and the payment was then processed. Like our investigator, I am of the view that HSBC’s intervention was proportionate and I can’t reasonably find that it should have done more. In reaching this view I have taken into account that despite the warnings Mrs I received she chose to go ahead with the payment shortly afterwards. I appreciate that Mrs I feels she was only given a brief warning, but having carefully listened to this call I cannot reasonably agree with Mrs I’s characterisation of the call. Mrs I then made a fifth payment in connection with this scam for £4,500 on 6 August 2024. The payment was to a new payee, a financial technology business – to an account held in Mrs I’s name. HSBC intervened again. It asked Mrs I why she was making the payment and explained that it had not been processed due to concerns about fraud. Mrs I told HSBC she had opened the account in order to send money to family overseas. Mrs I also told HSBC no one had instructed her to set up the account, or to send money to it. HSBC also asked Mrs I if anyone was guiding her and she said no one was helping her in any way. From the information that has been provided to this service of the conversation Mrs I was having with the scammers at around this time, it appears she did not answer HSBC’s questions truthfully. It appears she was being coached by the scammers to mislead her bank and had been instructed to set up the account in order to transfer money on to the scammers. It is very unfortunate that Mrs I did not answer HSBC’s questions truthfully, but I cannot reasonably say that HSBC could have done more to try to uncover whether Mrs I was falling victim to a scam. Mrs I then made two payments in quick succession on 11 September 2024 to the same payee as before. Both payments were for £4,000 and were sent to the account held in Mrs I’s name. HSBC intervened on the second payment. HSBC gave Mrs I warnings related to ‘safe accounts’ and asked about the purpose of the payment. Mrs I told HSBC she was sending money abroad and confirmed that no one had helped her set up the account. It is very unfortunate that Mrs I continued to mislead HSBC about the true purpose of the payments.

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HSBC intervened again on the next payment Mrs I made for £3,650 on 17 September 2024. Mrs I told HSBC the payment was going to an account held in her name and that she was transferring the money to send it ‘abroad’. When asked why she was sending the money overseas via a different account Mrs I said she would receive a better exchange rate if she transferred the money overseas from the account she was transferring her money to. Mrs I also incorrectly told HSBC she had held the account she was sending the money to for over a year, despite having only opened it very recently. She again told HSBC that she hadn’t been asked to make the payment by anyone. As our investigator noted, Mrs I knew this to be untrue as the chat records she has provided from her conversation with the scammers shows that the scammer was guiding Mrs I on moving money from this account to cryptocurrency wallets. Mrs I then made a further 13 payments over the next three months to this account, held in her name. The payments were for between £500 and £2,500. As the value and frequency of the payments did not increase significantly and the money was going into an account held in Mrs I’s name, I don’t think HSBC acted incorrectly when it didn’t intervene in these payments. In reaching this view I have taken into account that it had already spoken to Mrs I twice about payments she was making to this payee and Mrs I’s answers had not given it cause for concern. Likewise, I am mindful that Mrs I had previously made much higher value payments from her account, so moving larger sums of money was in-line with the way Mrs I had previously operated her account. Mrs I then paid £5,500 and £5,700 on 10 and 11 December respectively to this account held in her name. By this point she had sent £35,000 to this account over a four month period. On 12 December Mrs I made another payment, this time for £10,150. HSBC contacted Mrs I again about this payment. As the payment was going to an existing payee the intervention appears to have been more of a formality and the representative did not ask detailed questions about the purpose of the payment. Like our investigator I don’t think this intervention was as thorough as it could have been but given that Mrs I had repeatedly misled HSBC in previous conversations I can’t reasonably find that Mrs I would have answered more detailed questions truthfully on this occasion. In reaching this view I have taken into account that when HSBC spoke to Mrs I again on 23 December 2024 about another payment request, Mrs I again misled it about the true purpose of the payment. Mrs I told HSBC the payment was in connection with a property purchase overseas. She explained that she was not transferring the money directly from her HSBC account as she could obtain a better exchange rate by transferring her money overseas from the account she was transferring her funds to. Mrs I knew this claim was untrue. It appears HSBC was sufficiently concerned about the answers Mrs I provided, claiming she was being asked by the seller of the property to send smaller payments, rather than one lump sum and it asked Mrs I to visit a branch with identification if she wanted to proceed with the payment. Mrs I then visited her local branch on 24 December 2024 to make a payment of £9,300. The information available shows branch staff asked about the payment and confirmed the beneficiary was legitimate. Mrs I told staff the payment was to her own account. As our investigator noted, the branch staff would have been able to see that Mrs I had previously moved larger amounts between accounts held in her name so the transfer she had instructed them to make was not out-of-line with the way she had previously used her

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account. I note Mrs I says HSBC should have asked for evidence when she incorrectly told branch staff she was using the money to buy a property overseas. I appreciate Mrs I’s position, and with the benefit of hindsight the scam may have been uncovered had staff asked for this information. But I must take into account that Mrs I was moving money to an account held in her own name and she had previously made numerous similar transfers. In view of this I can’t reasonably find that the branch staff acted incorrectly when they processed Mrs I’s transfer in-line with her instructions. I appreciate that Mrs I feels the scam continued due to ‘….HSBC’s lack of meaningful effort and failure to provide a reasonable, proportionate response’. I cannot reasonably agree with Mrs I’s position. HSBC spoke to Mrs I on seven separate occasions about the payments she was making. The first time it spoke to Mrs I it warned her very clearly that there was a ‘very high risk of [this] turning out to be a scam.’ Despite this clear warning Mrs I chose to resubmit the payment later that day. Mrs I then misled HSBC in all the subsequent conversations about the true purpose of the payments she was making and disregarded the warnings she was given on each occasion. I cannot reasonably say that HSBC should have done more in the circumstances. Mrs I has also said there is no evidence she ‘…would have ignored a clear, firm warning if one had been provided’. Having listened to the call recordings I am satisfied that HSBC gave numerous clear warnings to Mrs I in the conversations it had with her. Having carefully considered this matter, I do not think any further interventions by HSBC would have been successful at breaking the scammer’s influence. Additionally, whilst I’ve not seen or heard all the interactions Mrs I had with the scammers, the apparent explanation for how the scheme to recover her money worked was implausible and I think Mrs I ought reasonably to have questioned whether the payments she was being asked to make could reasonably have been made by a legitimate business. The requirement to send funds, for the reasons the scammers gave, to receive repayment of funds she had already lost to a scam should have been a red flag. I also think Mrs I ought reasonably to have recognised the scammers could essentially have continued saying more money would be required to get her money back. This highlights the level of influence the scammers clearly held over her. I do not say this to be critical of Mrs I, I am simply highlighting that due to this I am not persuaded HSBC could have broken such a level of influence with further interventions. Therefore, I do not think HSBC could have prevented her losses. I don’t intend any comments or findings I’ve made in this decision to downplay or diminish the impact this scam has had on Mrs I. I have a great deal of sympathy for Mrs I being the victim of what was clearly a cruel scam that has had a significant impact on her. But I can only compel HSBC to refund Mrs I if it is responsible for the loss incurred. For the reasons explained, having carefully considered the circumstances of this complaint, I can see no basis on which I can fairly say that HSBC should be held liable for the loss Mrs I has sadly suffered. Recovery I’ve also looked at whether HSBC took the steps I would have expected it to take once it was aware that the payments were the result of fraud. Card payments

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I have considered whether there was a reasonable prospect of chargeback succeeding. The chargeback scheme is a voluntary agreement between card providers and card issuers who set the scheme rules and is not enforced by law. However, 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 can defend a chargeback if it doesn’t agree with the request. We would only expect a business to raise a chargeback if it were likely to be successful. Based on everything here, while the rules don’t cover scams, even if chargebacks had been raised, it’s most likely they wouldn’t have succeeded. Faster payments I’m satisfied that had HSBC contacted the receiving bank as soon as it was aware of the fraud this wouldn’t have made a difference in the circumstances. This is because, unfortunately, when Mrs I reported the fraud, it appears she had already sent the money from the receiving account to the scammers. My final decision For the reasons I have set out above, my final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs I to accept or reject my decision before 23 April 2026. Suzannah Stuart Ombudsman

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