Bank of Scotland plc · DRN-6166767

The complaint Mr W complains Bank of Scotland plc will not refund the money he lost as the result of a scam. Mr W brought his complaint through a representative. For ease of reading, I will refer solely to Mr W in this decision. What happened As both parties are aware of the details of the scam, I will not repeat them in full here. In summary, Mr W says he fell victim to an investment scam that he was introduced to as a way to recover funds he’d lost to a different scam. This was a platform that used AI technology to trade and Mr W was promised monthly returns of 6%. He made three payments to fund his investment – the first was returned to his account so there is no loss to consider, the second was on 25 January 2022 by international money transfer for £3,900 and the third was on 3 July 2023 by debit card for £7,943.44 (plus transaction fees of £238). Mr W realised he had been scammed when he received no returns and no withdrawals were possible. Mr W says Bank of Scotland did not do enough to protect his money. Bank of Scotland explained the payments were not covered by the principles of the Contingent Reimbursement Model (CRM) code as one was international and one was by debit card. Additionally, it had no reason to intervene during the payments as they did not attract suspicion. Our investigator did not uphold Mr W’s complaint. She wasn’t satisfied Mr W had submitted sufficient evidence for her to conclude he was the victim of a scam. But even if he was, she found Bank of Scotland was not wrong to process both payments without intervention. Mr W disagreed and asked for an ombudsman’s review. He said it was unfair to conclude he had not been scammed simply because he couldn’t no longer access his communication with the scammer. It was on its platform that is no longer live. There is sufficient other evidence to show this was a scam. And had the bank intervened when he made the last payment, it could have reduced his loss. 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 the investigator explained, this service first looks to establish whether a scam has taken place in complaints like this. Here some of the evidence we typically request and rely on to inform our decision is not available. However, on balance – so based on the balance of probabilities, i.e. the evidence we do have and the wider circumstances – I think it is reasonable to conclude that Mr W was likely the victim of a scam. I say this as his testimony includes details (for example, attending webinars; being introduced to the scam by a fellow victim of another scam; the promised rate of return) that align closely with the experiences of

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other victims of what seems to be the same scam. However, this finding does not change the outcome of Mr W’s complaint. I’ll explain why. There’s no dispute that Mr W made and authorised the payments. Mr W knew who he was paying, and the reason why. At the stage he was making these payments, he believed he was investing through a legitimate company. I don’t dispute Mr W was scammed and he wasn’t making payments for the reason he thought he was, but I remain satisfied the transactions were authorised under the Payment Services Regulations 2017. It’s also accepted that Bank of Scotland has an obligation to follow Mr W’s instructions. So in the first instance Mr W is presumed liable for his loss. But there are other factors that must be considered. To reach my decision I have taken into account the law, regulator’s rules and guidance, relevant codes of practice and what was good industry practice at the time. To note, as the payments were international/by debit card, the principles of the Contingent Reimbursement Model (CRM) code do not apply in this case. This means I think that Bank of Scotland should have: • been monitoring accounts and payments made or received to counter various risks, including fraud and scams, money laundering, and the financing of terrorism. • had systems in place to look out for unusual transactions or other signs that might indicate that its customers were at risk of fraud (amongst other things). This is particularly so given the increase in sophisticated fraud and scams in recent years, which financial institutions are generally more familiar with than the average customer. • in some circumstances, irrespective of the payment channel used, taken additional steps or made additional checks before processing a payment, or in some cases declined to make a payment altogether, to help protect its customers from the possibility of financial harm. In this case I don’t think Bank of Scotland ought to be held liable for the transactions. I’ll explain why. Mr W argues the payments were out of character for his account, but I don’t find they had any characteristics of possible financial harm. Mr W’s account typically carried a high credit balance. There were not frequent low-value transactions as is common. Rather, the account was used less frequently for higher-value payments or transfers. I can see other high-value debits, one of which was also an international payment. There was one for £20,250 three months prior to the second payment, and one for £18,000 six months prior to the third payment. The payments were not made in rapid succession, and they did not drain Mr W’s account. They were to different recipients and the higher value one was by debit card so would not go through the Confirmation of Payee process. In the round I cannot fairly conclude that Bank of Scotland ought to have identified Mr W was at risk of financial harm and intervened before following his payment instructions. It is not uncommon for an accountholder to make one-off higher-value transactions, and there is a different between that and payments that have high-risk characteristics. I have then looked at whether Bank of Scotland did what we would expect to try to recover Mr W’s funds once it became aware of the scam. This was on 23 October 2025. It contacted the receiving bank of the international money transfer but - unsurprisingly given the time since the scam - no money remained. For the last payment, as it was made by debit card

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raising a chargeback claim would have been the recovery route. However, given the time that had passed since the transaction Mr W was out of time – the rules of the chargeback scheme typically allow 120 days. To conclude, I am sorry Mr W lost a considerable amount of money and I can understand why he would like to recover his loss, but I can only consider the actions and role of the bank. And here, as I have not found it to be at fault in any regard, I am not instructing it to refund the payments. My final decision I am not upholding Mr W’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr W to accept or reject my decision before 21 April 2026. Rebecca Connelley Ombudsman

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