Santander UK Bank Plc · DRN-6129606

The complaint Mr M complains that Santander UK Bank Plc unfairly refuses to refund him money he lost in an investment scam. What happened In late November or early December 2024, Mr M says he was cold called by an investment company offering an investment in oil and gas. He was told his investment would double or triple in value within a few months and Mr M says the caller was persistent and he was called several times. Mr M decided to invest and made two payments, as follows: Date Amount Payment type Payment destination 10/12/2024 £5,000 International bank transfer Overseas company 16/12/2024 £5,000 International bank transfer Overseas company He attempted a third payment, on 19 December 2024, but following intervention from Santander the scam was uncovered, and the payment did not go ahead. Mr M then tried to contact the scammers to demand his money back, but he did not receive any response. Mr M complained to Santander and says Santander should have done more to prevent the scam and should refund his money. Santander says it doesn’t think this is an APP scam and on that basis, it hasn’t refunded him. The complaint was considered by one of our investigators, who recommended that Mr M’s complaint should be upheld in part. He noted that on each occasion Mr M made a payment he had spoken with Santander and he had been asked questions about the payments he was making. He thought Mr M had given Santander enough concerning information when making the first payment that Santander ought to have probed further. And he considered that if it had done so, it would most likely have uncovered the scam at that point. He did say that he thought Mr M should bear some responsibility for his loss because there were warning signs that he ought reasonably to have noticed and which should have raised suspicions that this might not be a genuine investment. Overall, he thought Santander should refund 50% of the value of each payment and add interest to that amount. Santander did not agree with the Investigator’s assessment and asked for an ombudsman’s decision. It said international payments are not covered by any codes or regulations, so it has correctly declined Mr M’s claim. It says it has fraud prevention and detection systems and procedures in place. It considers these were effective because they detected that the third payment was likely part of a scam and prevented the payment from going ahead. It said the first two payments were made through telephone banking and additional checks were made that went above the standard checks that would have been made if the payments had been made online. Santander says the payments were not unusual for the account, there was a healthy balance remaining and it was a business account, so larger payments might be more common. Additionally, Santander says Mr M was given warnings during the calls. For example, he was

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told that Santander sees lots of investment scams, especially involving the internet. He was asked whether he had researched the investment and was given suggestions for further checks. Mr M said the investment had been recommended to him, he had not found it online and he had researched the investment. He said he had spoken to an adviser, and while he said he had not met them in person, this was not unusual. It considers the interactions provided Mr M with relevant information and education but he proceeded with the transactions anyway. 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. Santander told Mr M it didn’t think this was a scam, but on balance, I’m satisfied it was a scam and Mr M has lost money as a result of it. He’s provided emails to and from the investment company he dealt with. There are warnings on the International Organisation of Securities Commissions (IOSCO) website from multiple regulators advising that this investment company was operating a scam. I accept the payments were routed to a different company,. However, considering evidence such as Mr M’s calls with Santander in which he discusses why the payments are being made in that way and the payment references for the payments (which were the name of the scam company), on balance I’m persuaded this was a scam. I note too that it was Santander who detected that this was a scam in the first place and persuaded Mr M to stop making payments. I also note that the payments came from Mr M’s business account. But he was a sole trader and therefore his business does not have a distinct legal personality – essentially, these were his personal funds and this is his loss, rather than a loss from a business with a distinct legal personality that he might own. The evidence also suggests this was a personal investment, rather than an investment for business purposes, so I’m satisfied Mr M has suffered a personal loss and is the appropriate party to bring the complaint. Having considered all the circumstances of this complaint, I have come to the same overall conclusion as the Investigator and for similar reasons. In broad terms, the starting position is that Santander is expected to process payments and withdrawals that a customer authorises it to make, in accordance with the accounts terms and conditions and with the Payment Services Regulations (PSRs). It isn’t in dispute that Mr M authorised these payments. Santander had an obligation to process the payments, but that isn’t the end of the story. I’ve taken into account the regulator’s rules and guidance; relevant codes of practice, along with what I consider to have been good industry practice at the time. Having done so, I consider Santander should have fairly and reasonably been on the lookout for the possibility of Authorised Push Payments scams (amongst other things) at the time, and intervened if there were clear indications its customer might be at risk. I accept Santander has a difficult balance to strike in how it configures its systems to detect unusual activity that might indicate its customers are a higher risk of fraud. It would not be reasonable or possible for Santander to intervene in every transaction it processes. I would expect intervention to be proportionate to the circumstances of the transaction. I understand Santander’s point that it does not consider the two payments were particularly out of the ordinary and that these were additional checks. The payments were reasonably significant in size, they were international payments and were being made to a payee Mr M hadn’t paid before, so there were risk factors present and Santander did intervene.

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Santander spoke with Mr M on 10, 16 and 19 December 2024, in relation to two payments and one attempted payment. On each occasion it asked Mr M questions about the payments and it gave him some warnings about scams. I accept Santander’s point that it had systems and procedures in place to detect fraud and that these were successful in preventing a third payment from taking place. However, like the Investigator, I consider there was enough concerning information provided by Mr M to Santander during the calls on 10 December that Santander ought to have probed further. If it had done, I consider it is likely it would have uncovered this scam at that point and prevented Mr M’s losses. Santander realised Mr M was likely being scammed when it spoke to him on 19 December, but not in the earlier calls on 10 and 16 December. There were some differences between the information Santander had available to it between the 10 December and 19 December calls, for example in the first call Mr M was making an initial investment, by 19 December, he had been asked to pay for fees and he mentioned this to Santander. But Mr M was fairly open throughout all his interactions with Santander and he said enough in the first call that I think Santander ought to have been suspicious. Key pieces of information were that he was being advised by someone he had been talking to on the telephone, to make a payment for an investment to a payee in Italy. It was a new investment and he hadn’t met the adviser. These were features that should have made the payment appear a higher risk of fraud, in my view. Mr M was asked if he had looked up the company on the FCA register and he said he had checked and it was registered with the FCA. While I accept Mr M had told Santander he was talking to an FCA registered adviser, a UK registered investment adviser asking a customer to make a payment for an investment to a payee in Italy is quite unusual and should have prompted further questions in my view. When this same information was given to Santander on 19 December, it led Santander to ask further questions and uncover the scam. In the call on 10 December, Mr M was asked a series of relevant questions, and Santander established Mr M was making a payment to a payee in Italy, for a new investment. He told Santander he had been recommended the investment, he hadn’t checked the company on Companies House, but he had checked the FCA register and it was registered. He was passed to another adviser at Santander and was cut off, phoned again and was passed on to another member of staff. In that call Santander gave warnings about investment fraud that were relevant, it queried some of Mr M’s answers and Santander’s member of staff was clearly surprised by some of Mr M’s answers – that he didn’t know whether the payment needed to be made in Euro or Sterling and he didn’t have a reference or account number so the investment company could identify who the payment was from. Santander told him about the importance of knowing what he was investing in. Santander then asked Mr M what he was investing in, and Mr M gave ‘Financial Services’ as the answer, which I find rather vague, but which Santander accepted. In the call on 19 December, similar questions were asked, but Santander noted some inconsistency from Mr M about how he had found out about the investment. Santander searched for the payee online and couldn’t find it and, it checked the FCA Register and couldn’t find it listed there. Santander’s staff member contacted the fraud team, telling them about the inconsistencies, checking the company online and querying why he would be paying an Italian payee for an investment made through a FCA Registered business. Santander’s fraud team spoke to Mr M and concluded it was likely a scam. It questioned why a FCA Registered company would be asking Mr M to send money to Italy, amongst other things. There were enough unusual features that came up on 10 December that I consider Santander ought to have probed further before making this payment. For example, the lack

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of clarity about what Mr M was investing in, why he was being asked to make a payment to Italy, why he didn’t have an account number or reference and not knowing whether he needed to pay it in Euro or Sterling. While I’m conscious that Mr M gave Santander some information that was not accurate when he was speaking to Santander, there is no evidence he was coached to do so. It did not take much probing on 19 December to uncover the scam, with more or less the same starting information that was available on 10 December. In my view, those probing questions should have been asked on 10 December. If they had been, I’m satisfied it’s likely the scam would have been uncovered, just as it was on 19 December, because Mr M couldn’t answer the simple question of why he was being asked to make the payment to a company in Italy. Having considered all the circumstances of this complaint, I do consider that Mr M should bear some responsibility for his loss. He gave Santander several pieces of information that were not accurate and, while I consider Santander ought to have probed further, Mr M could potentially have prevented his losses if he had given more accurate answers. For example, he told Santander he had been recommended this investment, but he told us he had been cold called. That would have been another concerning feature if he had given Santander accurate information. He also told Santander he had checked the FCA Register and that the company he was dealing with was FCA registered. But it seems he did not check because the company is not listed on the FCA Register. Again, while I think Santander missed the chance to ask some straightforward follow up questions, Mr M made matters more difficult by saying he had checked the FCA Register. I don’t think it was reasonable to provide inaccurate information and in all the circumstances, I consider the fairest outcome if for the parties to share responsibility equally. Putting things right Santander must pay Mr M 50% of each payment and pay interest on those amounts at the rate of 8% simple per year from the date each payment was made to the date of settlement. My final decision I uphold Mr M’s complaint and I require Santander UK Plc to pay Mr M compensation as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 3 April 2026. Greg Barham Ombudsman

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