Santander UK Plc · DRN-6244631

The complaint Miss W is being represented by solicitors. She’s complaining about Santander UK Plc because it declined to refund money she lost as a result of fraud. What happened Sadly, Miss W fell victim to a cruel investment scam after someone she’d met and been chatting to online introduced her to a fraudulent investment scheme and set her up with an account on a fake platform that appeared to show trades being made and profits generated on her behalf. Miss W says she realised this was a scam when she tried to withdraw her money and was told she’d have to pay extensive fees to do so. In June 2024, Miss W used her Santander account to make the following transfers to a cryptocurrency exchange, from where the currency purchased was transferred to the scammers: No. Date Amount £ 1 28 June 1,000 2 28 June 500 3 28 June 2,000 4 29 June 4,900 5 29 June 6,400 Miss W tried to make three further payments to the cryptocurrency exchange on 29 June that were returned on the same day. I understand she then tried to make a further payment and was required to call the bank to discuss the situation before it was processed. Following discussions with one of its agents, the payment wasn’t approved and Santander closed Miss W’s accounts a few days later. Account statements show no evidence of any returns from the scam before that action was taken. My provisional decision After the complaint was referred to me, I issued my provisional decision setting out why I thought it should be partly upheld. My reasons were as follows: There’s no dispute that Miss W authorised these payments. In broad terms, the starting position at law is that a bank is expected to process payments a customer authorises it to make, in accordance with the Payment Services Regulations and the terms and conditions of their account. In this context, ‘authorised’ essentially means the customer gave the business an instruction to make a payment from their account. In other words, they knew that money was leaving their account, irrespective of where that money actually went. But, taking into account relevant law, regulators’ rules and guidance, relevant codes of practice and what I consider to have been good industry practice at the time, I consider it fair and reasonable that Santander should:

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• have been monitoring accounts and any payments made or received 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. This is particularly so given the increase in sophisticated fraud and scams in recent years, which firms are generally more familiar with than the average customer; • 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; • in some circumstances, irrespective of the payment channel used, have taken additional steps, or made additional checks, or provided additional warnings, before processing a payment; and • have been mindful of – among other things – common scam scenarios, how fraudulent practices are evolving (including for example the common use of multi-stage fraud by scammers, including the use of payments to cryptocurrency accounts as a step to defraud consumers) and the different risks these can present to consumers, when deciding whether to intervene. Taking these points into account, I need to decide whether Santander acted fairly and reasonably in its dealings with Miss W. The payments I must take into account that many similar payment instructions Santander receives will be entirely legitimate. I also need to consider its responsibility to make payments promptly. But at the same time, the bank knew these payments were going to cryptocurrency and should have recognised that payments to cryptocurrency carried a higher risk of being associated with fraud, including multi-stage fraud involving payments to fraudsters via legitimate cryptocurrency accounts. Having considered what Santander knew about payments 1 and 2 at the time, particularly that the amounts involved were relatively low, I’m not persuaded it ought to have been concerned. While I understand Miss W had invested in cryptocurrency previously, the bank says her Santander account had been dormant for some time at this point, meaning it wouldn’t have known about that activity. Overall, I don’t think there were sufficient grounds for the bank to think Miss W was at risk of harm from fraud when she made these payments and I can’t reasonably say it was at fault for processing them in line with her instructions. But payment 3 was Miss W’s third payment to the cryptocurrency exchange on the same day, with a combined value of over £3,000 and this is the point at which I think a pattern of multiple, rapid and increasing payments consistent with many known scams had begun to emerge. I think Santander should have identified this risk and that a proportionate response would have been to ask in the app about the purpose of the payment and show a tailored written warning based on the response received. Santander doesn’t appear to have taken any action at this point. But having thought carefully about the effect this type of intervention might have had, I’m not persuaded a written warning would have been enough to stop Miss W from going ahead with payment 3. In reaching this conclusion, I’ve taken account of her phone conversation with one of Santander’s agents on 1 July in which Miss W didn’t provide accurate information about the reason for the further payment she was trying to make, telling the agent she was repaying money she owed to a long-standing friend. I’ve no reason to think

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she’d have been any more truthful if she’d been asked this in the app, meaning any attempt to show a warning that was truly tailored to her circumstances would have been hampered. I’m also conscious Miss W had been investing in cryptocurrency for some time and appears to have been under the spell of the scammers to the point where she was prepared to hide what she was really doing. In the circumstances, I’m not persuaded a written warning would have made any difference. Payment 4 was significantly larger than what had gone before and was Miss W’s fourth payment to cryptocurrency in less than 24 hours, now with a combined total of more than £8,000. Given the increased risk this payment presented, it’s my view that this is the point at which Santander should have stepped up its intervention and required her to speak to one of its agents before it was processed. I note Santander did take this step when Miss W tried to make further payments after payment 5, but I find that the circumstances warranted this intervention at an earlier stage. In considering the effect a human intervention before payment 4 left Miss W’s account might have had, I have taken into account the way she responded to the bank’s agent on 1 July. But despite the fact she didn’t give accurate answers about the reason for the payment in question, the fact Santander didn’t approve the payment (and ultimately went on to close her account a few days later) indicates it wasn’t satisfied with her answers. If she’d spoken to an agent two days earlier on 29 June, I’ve seen no reason to think the conduct of the call would have been any different, or that the bank would have been any more willing to allow the payment to proceed based on the same answers from Miss W. It’s reassuring to see that Santander did ultimately recognise the risks associated with the activity on Miss W’s account and that appropriate intervention was taken to try and protect her. My only contention is that this intervention should have come at an earlier stage. And if it had done, it’s my conclusion that the outcome would have been much the same and the losses from payment 4 would thereby have been prevented. I think it follows that if Santander had acted in this way to prevent payment 4, payment 5 would also have been prevented. Is it fair and reasonable for Santander to be held responsible for Miss W’s loss? I have taken into account that Miss W remained in control of her money after making the transfers from the bank and that it wasn’t lost until she took further steps. But Santander should still have recognised she was at risk of harm from fraud, made further enquiries about payment 4, and ultimately prevented her loss from that point. I think Santander can fairly be held responsible for any loss in these circumstances. While I have considered all of the facts of the case, including the role of other financial institutions involved, Miss W has chosen not to pursue a complaint about any other firm and I can’t compel her to do so. Further, I don’t think it would be fair to reduce her compensation because she’s only complained about one firm, as I consider that Santander should have prevented the loss. Should Miss W bear any responsibility for her losses? I’ve considered the evidence carefully to decide what’s fair in the circumstances. While I accept Miss W believed these payments were being made in connection with a legitimate investment opportunity, I’m not persuaded that belief was a reasonable one.

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In particular, I’m conscious Miss W invested on the advice of someone she’d never met in person and who’d contacted her out of the blue. Further, she doesn’t appear to have received any of the agreements or other documentation I consider someone would reasonably expect to receive in connection with an investment of this size. Also, the returns she says she was told to expect were extremely high and I think she should reasonably have questioned whether this was too good to be true. In the circumstances, I think Miss W ought to have proceeded with great caution. If she’d carried out further research, for example online searches, I think she’d have discovered her circumstances were similar to those commonly associated with investment fraud. Overall, I think it’s fair and reasonable for Santander to make a 50% deduction from the redress payable. Recovery of funds I’ve also looked at whether Santander could or should have done more to try and recover Miss W’s losses once it was aware the payments were the result of fraud. The fact the payments went to a legitimate account in her own name means Miss W isn’t eligible for a refund under the industry’s reimbursement scheme for authorised push payment (APP) fraud. Further, Santander could only try to recover money from that account and it appears the money had already been moved on by the time it was told about the scam. And if not, anything that was left would still have been available for Miss W to access. In the circumstances, I don’t think that anything Santander could have done differently would likely have led to Miss W’s money being recovered successfully. In conclusion For the reasons I’ve explained, I don’t think Santander acted fairly and reasonably in its dealings with Miss W and I’m proposing to uphold this complaint in part. I don’t think it acted incorrectly in processing payments 1 and 2 in line with her instructions, or that a written warning would have prevented payment 3. But if the bank had carried out an appropriate human intervention before payment 4 left the account, I’m satisfied payments 4 and 5 would have been prevented. The responses to my provisional decision Miss W’s representative confirmed her acceptance of my provisional decision. Nationwide had nothing further to add other than to say that it disagrees with my provisional decision for the reasons outlined previously. 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. As neither party has made any further submissions, my findings haven’t changed from those I set out in my provisional decision.

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Putting things right The principal aim of any award I make must be to return Miss W to the position she’d now be in but for the errors or inappropriate actions of Santander, while allowing for any responsibility she should reasonably bear. If Santander had carried out an appropriate intervention as I’ve described, I’m satisfied the scam would have been stopped and Miss W would have retained the money that was lost from payments 4 and 5. As outlined above, I’ve applied a 50% deduction to the amounts to be refunded in recognition of Miss W’s own contribution to the loss. To put things right, Santander should pay Miss W compensation of A + B, where: • A = a refund of 50% of each of payments 4 and 5; and • B = simple interest on each amount being refunded in A at 8% per year from the date of the corresponding payment to the date compensation is paid. Interest is intended to compensate Miss W for the period she was unable to use this money. HM Revenue & Customs (HMRC) requires Santander to deduct tax from any interest. It must provide Miss W with a certificate showing how much tax has been deducted if she asks for one. I’m satisfied this represents a fair and reasonable settlement of this complaint. My final decision My final decision is that I partly uphold this complaint. Subject to Miss W’s acceptance, Santander UK Plc should now put things right as I’ve set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss W to accept or reject my decision before 20 April 2026. James Biles Ombudsman

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