Lloyds Bank PLC · DRN-6042911

The complaint Mr G complains that Lloyds Bank PLC will not refund money he lost when he was a victim of an investment scam. Mr G is professionally represented, however for ease, I’ll refer to Mr G throughout my decision. What happened The background to this complaint is well known to both parties and so I’ll only refer to some key events here. Mr G has explained that he fell victim to an investment scam in 2025, whereby he came across a firm, which I’ll refer to as ‘X’, advertised on social media referring to an investment opportunity. As part of this alleged scam, Mr G made payments to a genuine crypto exchange provider from his Lloyds account, as well as sending funds from Lloyds to an account held at an Electronic Money Institute (EMI), which I’ll refer to as ‘R’, and then onto X via various genuine crypto exchange providers, which X helped him set up using remote access software, that was subsequently lost to the scam. In total Mr G sent £33,670 between 19 December 2024 to 31 January 2025, from his Lloyds account to R and then onto X. Mr G also made a £2,000 payment from his Lloyds account directly to a crypto exchange provider and then onto X. Lloyds have already refunded 50% of the £2,000 payment Mr G made via the crypto exchange, including paying 8% interest and £50 for the distress and inconvenience caused to Mr G. Mr G has also raised a complaint against L, which I will address separately. Mr G realised he’d been scammed when, he attempted to withdraw his investment and he kept being told by X to make numerous payments of increasing value for various withdrawal fees. Mr G raised a complaint with Lloyds, which they partially upheld as mentioned above. However, Lloyds didn’t agree to refund the payments he sent to R, which were eventually lost to X, so the matter was referred to our service. Our Investigator agreed with the refund they had already provided and didn’t agree to uphold the rest of the complaint. She said, Lloyds and R made several proportionate interventions, and she didn’t think any further interventions would’ve uncovered the scam or prevented Mr G from sending the funds. And based on the answers he provided to the various interventions, she didn’t think Lloyds needed to do anything else. Mr G didn’t agree and said Lloyds should have done more to protect him from the investment scam he fell victim to. As no agreement could be reached, Mr G’s complaint has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and

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reasonable in the circumstances of this complaint. I’m sorry that Mr G has been the victim of a scam. But while I appreciate this has had a significant impact on him, I think Lloyds has acted fairly by refunding the amount they have, and I wouldn’t be asking them to do anything else. My first consideration is in relation to the CRM code which can offer a potential means of obtaining a refund following scams like this one. And, while Lloyds has signed up to the CRM code, the payments unfortunately aren’t covered under it. This is because the CRM code doesn’t cover payments made to an account held in a person’s own name – which is what happened here. So, I can’t fairly direct Lloyds to refund payments under the CRM code if they’re not covered by it. I’ve therefore considered whether Lloyds should reimburse Mr G under any of their other obligations. In broad terms, the starting position in law is that a bank is expected to process payments that their customer authorises them to make. Here, it isn’t disputed that Mr G knowingly made the payments and so, I’m satisfied he authorised them. Therefore, under the Payment Services Regulations 2017 and the terms of the account, Lloyds are expected to process Mr G’s payments, and he is presumed liable for the loss in the first instance. However, 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 Lloyds to take additional steps or make additional checks before processing a payment to help protect customers from the possibility of financial harm from fraud. Here, Lloyds has already accepted they could’ve done more to protect Mr G from the scam. Because of this, they decided to refund 50% of his loss at it held Mr G equally liable for the loss – from the only payment he made to the crypto exchange provider for £2,000 on 12 December 2024. As a result, I will focus on whether Lloyds should have intervened on the later payments he made from his Lloyds account to R to fund the scam, and whether it is fair and reasonable for the amount refunded to Mr G to be reduced by 50% due to contributory negligence on his part. I appreciate that there were sophisticated aspects to this scam – however having looked at the later transactions Mr G made; I do think it is reasonable to conclude it would have been rational for Lloyds to have contacted Mr G to establish if the high value payments he was making to R were being made for legitimate reasons or not. However, even if Lloyds had reached out to establish the circumstances of the payments Mr G was making, I am not persuaded they would have uncovered the scam. I will explain why. For me to find it fair and reasonable that Lloyds should refund Mr G requires more than a finding that Lloyds ought to have intervened or done more, but crucially I’d need to find that but for this failure the subsequent loss would’ve been avoided. That latter element concerns causation. A proportionate intervention will not always result in the prevention of a payment. And if I find it more likely than not that such a proportionate intervention by Lloyds wouldn’t have revealed the payments were part of a fraud or scam, then I couldn’t fairly hold them liable for not having prevented them from being made. Lloyds interventions Lloyds have confirmed they had two calls with Mr G on 12 December 2024, when he attempted to make the first two payments to crypto exchange providers under the guidance of X to fund the scam for £2,000 each, which were both declined, as they had concerns he may be falling victim to a scam. On the first call, Mr G told the Lloyds advisor, he was

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sending money to his own account and no one had asked him to open the account. Mr G was asked a bout the reason for the payment, which he said: “from that bank it's easier in my country to use this because I will fly soon to my country. From Lloyds I had last time problem”. Based on the answers he was providing, Lloyds removed the blocks on his account. On the second call Mr G had with Lloyds on the same day, he again mentioned he was making a payment to his own account, and confirmed he hadn’t received any strange telephone calls, or messages about asking him to move the money or lie to his bank. He also confirmed that he hadn’t been asked to invest his money. He explained that he was flying to his country in December and he would use the account there. He confirmed that nobody was asking him to make the payment, so the payment was made successfully. Having listened to the calls from Lloyds to Mr G, Lloyds ought to have known at the time that the details provided by Mr G were for a well-known cryptocurrency provider, meaning any payments to that account were in relation to cryptocurrency. So, taking that into account I think Lloyds ought to have focused its warnings on the risks associated with cryptocurrency payments before the payment went ahead. Mr G believes that better intervention from Lloyds would have prevented his loss. Where something didn’t happen that should have, I’m required to make a decision based on the balance of probabilities; that is, what I find is more likely than not to have happened if things had gone as they should. I’ve carefully considered all the available evidence. But having done so, I’m not persuaded that a cryptocurrency warning from Lloyds, which went into more detail, would have made a difference to Mr G’s decision to go ahead with the payment. I say this because R did provide Mr G with cryptocurrency investment warnings later in the payment journey, which I’ve highlighted below. And based on the responses Mr G gave R, I’m satisfied if Lloyds had asked him similar questions and provided warnings about crypto investment scams, he would have responded in the same way. R’s interventions R have said Mr G was provided with the following warning each time he attempted to make a payment to a new beneficiary from 20 December 2024 to 30 January 2025 to fund the scam: “Do you know and trust the payee? If you’re unsure, don’t pay them, as we may not be able to help you get your money back. Remember, fraudsters can impersonate others, and we will never ask you to make a payment.” Once Mr G acknowledged the above warning, R have mentioned they still had concerns about numerous payments he made, and asked Mr G a series of questions, across seven different transactions he attempted. I won’t go into detail about the responses Mr G provided, however, I’ve summarised some of his responses below: o He’s transferring money to his other account. o He wasn’t asked to install software. o Nobody told him his account isn’t safe. o The money is going into an account he controls.

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Mr G was also shown the following warning on a few occasions by R: “If someone is telling you to ignore these warnings, they’re a scammer – only continue if you’re sure nobody is pressuring you to make this payment.” Mr G still confirmed he wanted to continue with the payments. Based on the answers Mr G provided, he was shown various warnings by R, some of which were not relevant to his situation. However, this was based on the answers Mr G provided to the questions he was asked. So, R rely on customer’s providing honest answers to the questions they are being asked. For example, Mr G had the option to select, he was making payments ‘as part of an investment’, on various occasions, however, he chose the option which said, ‘transfer to my other account’ on each occasion, which resulted in warnings being provided for safe account scams and impersonation scams. Some of the warnings were still relevant to Mr G’s situation, as they highlighted the risks of unexpected calls, not giving anyone remote access, being told to ignore warnings, to name a few. On 8 January 2025, when Mr G attempted a £3,000 payment from his R account to a crypto exchange provider, after answering a series of questions he was asked by R, Mr G was directed to their in-app chat as they were not satisfied with the answers he provided. Mr G provided the following responses to the questions he was asked: o He is transferring money to his saving account. o He isn’t investing in cryptocurrency; he is just transferring money to a different account for deposit. (R asked for a screenshot of the account he was sending the money to, which Mr G duly provided) o No one has contacted him asking him to take urgent action, such as to pay a fine and he hasn’t been legally threatened with imprisonment. o No one has asked him to install remote control applications like Anydesk or Teamviewer. o He was transferring funds from his Lloyds account to another account and he wants this transfer to be completed as he is making the transfer to his own account, and this is not fraud. On 17 January 2025, Mr G was again directed to the in-app chat when he attempted a payment of £399 to a known crypto provider. R asked Mr G to provide a screenshot of the account the payment was going to, which he did. Mr G mentioned this was not an investment account and it’s just his own account where he can buy crypto when he wants to, so he asked R to complete their checks and let him use his own R account. Based on the information provided, R were not satisfied with the answers Mr G provided, so a phone call was initiated with him. Mr G provided the following responses to the R advisor on the call: o He created his R account to move money to his other account and sometimes buy crypto. o The R account was recommended to him by his friends, because many of his relatives have R accounts, as it’s easier to use abroad. o He’s been dealing with crypto for one year. o He’s aware of how crypto works. o His friend recommended him to buy crypto and he is helping him. o After moving the funds into the crypto account, he will leave it there and he will put it all back into his R account. o He’s satisfied the payment he is making is genuine, and he is aware of the high risk involved in proceeding with the payment, and he is prepared to lose all his money if the payment turns out to be a scam.

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R then provided him with warnings about the high-risk nature of crypto investments as well as crypto investment scam warnings, and Mr G confirmed he was not falling victim to a scam and was happy for the payment to be processed. I will not set out the specifics of the conversations Mr G had with X here, as he is already familiar with it. But having looked at it, it’s very clear that he was being heavily coached and influenced by X from the start of the scam. This is evident from Mr G being guided by X on how to handle any interventions and given the answers Mr G provided at the time it’s clear he was being guided by X in his responses. It’s also evident Mr G sought advice from X which he followed, which meant Lloyds were unable to uncover the scam. I therefore don’t think any further interventions from Lloyds would have been able to counter the heavy coaching Mr G was receiving from X or break the scammer’s spell such that Lloyds could have uncovered the scam and prevented Mr G’s losses. I now turn to the refund Lloyds have provided on one of the payments as mentioned previously. When considering whether a consumer has contributed to their own loss, I must consider whether their actions showed a lack of care that goes beyond what we would expect from a reasonable person. I must also be satisfied that the lack of care directly contributed to the individual’s losses. I’ve concluded, on balance, that it would be fair to reduce the amount Lloyds pays Mr G because of his role in what happened. Had he been more forthcoming with Lloyds, or R, the scam could have been uncovered sooner. So, I think a fair reduction is 50% in the refund already provided by Lloyds. I’ve also considered whether, on being alerted to the scam, Lloyds could reasonably have done anything more to recover Mr G’s losses from the payments he made to R to fund the scam, but I don’t think they could. The payments Mr G were made into accounts with R and a crypto exchange in his own name, which were then forwarded onto X. But even if some funds remained, they would’ve been in Mr G’s control and he could’ve accessed them himself. So, I wouldn’t have expected Lloyds to have done anything else to help recover Mr G’s funds. I have a great deal of sympathy for Mr G and the loss he’s suffered. But whilst I haven’t made this decision lightly, I don’t think Lloyds need to provide him with any further refund. My final decision My final decision is I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr G to accept or reject my decision before 27 April 2026. Israr Ahmed Ombudsman

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