Barclays Bank UK PLC · DRN-6247392

1 DRN-6247392 The complaint Mr C complains that Barclays Bank UK PLC (Barclays, hereinafter) hasn’t refunded the losses he’s incurred when falling victim to an investment scam. What happened The facts are well known to both parties, so I have outlined the key details. In summary, Mr C says he found an investment opportunity online involving cryptocurrency, allegedly endorsed by a notable celebrity, on or around October 2024. Unbeknown to Mr C, this was sadly a scam. Mr C was persuaded by the scammer to move all of his savings, as well as apply for some loans to fund the scam via his Barclays account and another bank account in his name with a high street firm I’ll refer to as N. They directed him to open cryptocurrency wallets with two renowned cryptocurrency providers I’ll refer to as C and O, through which he then sent the funds to them. From his Barclays account Mr C made three faster payments to top up his cryptocurrency wallet with C, totalling £36,250, between 7 and 22 November 2024. Mr C attempted a further payment for £15,000 on 27 November 2024, which was however intercepted by a Barclays fraud specialist, who managed to unveil the scam for Mr C. During that call Mr C made a fraud report about his previous transactions too. Shortly after Barclays’ intervention, Mr C was persuaded by the scammer to make another payment from his account with N. Mr C fully realised he had been scammed when, having made the last payment, the scammer didn’t release his investment, but rather demanded even more funds. Mr C raised a complaint with N and was refunded for the scam payments he made from that account. However, Barclays refused to refund Mr C on the basis that it intervened appropriately by blocking and querying the payments, but that it couldn’t do more than it did, due to Mr C being untruthful. It also said the point of loss was ultimately C, and so Mr C should direct his complaint to C. So, Mr C referred a complaint to the Financial Ombudsman Service. Our Investigator found that Barclays should have intervened when Mr C made the first scam payment and should have probed his answers further, given Barclays knew or ought to have known that the receiving account was linked to a cryptocurrency exchange. However, our Investigator said that even if Barclays had done that and unveiled the scam earlier than it did, it could not have prevented Mr C’s losses as Mr C continued to make payments to the scammer even after reporting the scam to Barclays, until he ran out of money. Mr C disagreed with our Investigator’s view, arguing that he only told the scammer he had ran out of money to stop them from contacting him further. He insisted that Barclays’ interventions didn’t go far enough, and that if they had warned him properly from the outset, his losses could have been prevented. In light of this disagreement, I have been asked to review everything afresh and reach a decision on the matter.

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2 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. 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. Where the evidence is incomplete, inconclusive, or contradictory, I must make my decision on the balance of probabilities – that is, what I consider is more likely than not to have happened in the light of the available evidence and the wider surrounding circumstances. I don’t doubt Mr C has been the victim of a scam here – he has lost a large sum of money and has my sympathy for this. However, just because a scam has occurred, it does not mean Mr B is automatically entitled to recompense by Barclays. It would only be fair for me to tell Santander to reimburse Mr C for his loss (or a proportion of it) if: • I thought Barclays reasonably ought to have prevented all (or some of) the payments Mr C made, or • Barclays hindered the recovery of the payments Mr C made whilst ultimately being satisfied that such an outcome was fair and reasonable for me to reach. I’ve thought carefully about whether Barclays treated Mr C fairly and reasonably in its dealings with him, when he made the payments and when he reported the scam, or whether it should have done more than it did. Having done so, I’ve decided to not uphold Mr C’s complaint, and for broadly the same reasons as our Investigator. I’m aware this news will come as a great disappointment for Mr C, and I’m very sorry for the predicament he finds himself in. So, I’d like to explain why I’ve reached this outcome. Did Mr C have control of the receiving account and did he authorise the payments? I understand there were originally some concerns over whether Mr C was in control of the receiving account with C, or whether he lost control of his funds from the moment they left his Barclays account This is an important consideration as it determines whether Mr C’s payments were protected by the Authorised Push Payment Reimbursement Rules or not. I’ve carefully reviewed the evidence available, and I’ve come to the conclusion that Mr C had control of the receiving account with C. I say this because: • Mr C was able to access his wallet with C whilst on the phone to Barclays – as can be listened to in the call of 3 December 2024, and he regularly received genuine correspondence from C into his email inbox, which he sent evidence of to our service. • Barclays has also shown it approached C during its investigation, who confirmed Mr C accessed his cryptocurrency wallet from his registered device and made payments from there. • Moreover, Mr C has confirmed in his testimony that he was making the payments under the strict guidance of the scammer, except for one payment that he wasn’t able to complete alone and which required the assistance of the scammer through remote access software.

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3 For the purpose of authorisation, it doesn’t matter whether it was the scammer who completed the payment steps or Mr C, as long as Mr C was aware that funds would be leaving his account by doing so. Based on Mr C’s testimony, I’m satisfied he had access to the receiving account and authorised all of the payments from his Barclays account and beyond. So, under the Payment Services Regulations 2017 (PSR 2017) he is presumed liable for the loss in the first instance. Moreover, because Mr C had access and control of the receiving account, the Authorised Push Payment Reimbursement Rules don’t cover his scam payments. 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. So, overall, 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 – Barclays should fairly and reasonably: • Have been monitoring accounts and any payments made or received to counter various risks, including anti-money laundering, countering the financing of terrorism, and 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, irrespective of the payment channel used, have taken additional steps, or make additional checks, before processing a payment, or in some cases decline to make a payment 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. Was Barclays intervention proportionate in the circumstances? So, I’ve thought about whether the transactions should have highlighted to Barclays that Mr C might be at a heightened risk of financial harm due to fraud or a scam. In line with our Investigator’s findings, I also agree Mr C’s scam payments should have been identified as suspicious from the outset, due to their individual amount and the fact they were going to an identifiable cryptocurrency provider. And I agree that, due to the size of the payments, the proportionate response would have been for Barclays to block them and query them further with Mr C. The evidence shows that Barclays did query each scam payment Mr C made from its banking facilities. However, for the first three payments, it didn’t probe Mr C’s answers enough. Mr C had been heavily coached by the scammer on what to say, should either bank have asked to speak with him about his payments. So, when Barclays asked, he said that he had opened a savings account with C about a year prior and that he was keeping his money there because the interest was higher. When asked whether he was sending funds to a cryptocurrency exchange, he denied. I’ve considered the evidence available from Barclays’ submissions about the receiving account sort code and number and borne in mind that one of its own fraud specialists was able to unveil the scam by revealing the payments were going to an identifiable cryptocurrency provider further down the line.

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4 So, I’m of the opinion that Barclays should have questioned Mr C’s cover story during the earlier interventions too, as it wasn’t plausible enough. Had it done so, it would have become apparent that Mr C was sending his money to a scam. So, I’m satisfied Barclays didn’t do enough to warn and protect Mr C from the risk of being scammed, in light of the red flags available. But this isn’t the end of the story. It would only be fair and reasonable for me to award a refund in this complaint if I thought that, had Barclays better intervened earlier in the scam, this would have resulted in Mr C’s losses being avoided. But I’m afraid that would not have been the most likely outcome here. I’ll explain why. Would a better intervention have prevented Mr C’s further losses? The question for me to answer next is whether, on the balance of probabilities, Barclays would have been able to prevent Mr C’s further losses, had it probed his earlier payments beyond the extent that it did. I’ve considered that point very carefully and I’m not persuaded it would have been. The evidence available to me strongly points to Mr C being too deep under the scammer’s spell to heed any warnings from either of his banks. I say this because: • Mr C was given comprehensive and unequivocal advice by Barclays’ fraud specialist on 27 November 2024 that he was falling victim to an investment scam. The fraud specialist described the main features of cryptocurrency investment scams to him, and dwelled specifically on verification, liquidity requests and needing to pay to release funds from an escrow account – which were the reasons Mr C was asked to send funds to the scammer – so this advice should have clearly resonated with him. However, Mr C decided to bypass the bank’s advice and make one more payment to the scammers. • Mr C appeared to have been persuaded at first that he had really fallen victim to a scam because he proceeded to raise a fraud report with the fraud specialist there and then. So, I can’t say that there were any signs of hesitation for which the fraud specialist should have taken further steps such as blocking Mr C’s account, as Mr C made Barclays believe at that point that he accepted he had been scammed and was committed to lodging and pursuing a formal fraud report. • Mr C was irreparably under the scammer’s spell at that point and in the following days, when he then made the payment from his account with N. At this point in the scam, the scammer’s requests were less and less plausible, with Mr C having sent thousands of pounds already to try and release his investment. The evidence points to him being so desperate to recoup his funds and caught up in the scam to the point he was willing to lie to N about how he knew the recipient and pay a random third- party account. The chat transcripts with the scammer show he went to great lengths to ensure his cover story was bullet proof, if the bank had asked about his payment. This again shows that Mr C was more likely to follow the scammer’s advice than his own banks, even when that entailed fabricating intricate cover stories to bypass fraud detection. • Mr C told us he hadn’t run out of money, he simply made the scammers believe it, so they would leave him alone, to show that he exercised his judgement in deciding to stop all contact. But I think it’s most likely that he fully stopped engaging with them, because he entirely ran out of disposable funds, having borrowed from friends, financial institutions, and dried up his savings accounts, and having put himself and his wife in a financially compromised position. • Mr C insists that earlier intervention from Barclays could have had a different effect on his judgement, but I haven’t seen sufficient evidence supporting such finding. I

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5 must consider that by the first payment he made with Barclays on 7 November 2024, Mr C had already borrowed extensively and made other payments to the scammer from his account with N. So, I think it’s most likely he would have felt equally pressured to recoup his funds and pay off the debts he had accrued through the scam at the point he made the first payment with Barclays. Because of the pressure he was already experiencing, I think it’s unlikely that earlier better intervention from Barclays would have had a different effect on Mr C’s judgement. • I’ve taken into account that Mr C held concerns about the investment being a scam from as early as 29 October 2024 and yet he proceeded to give misleading answers to both Barclays and N, time and time again. He received warnings from C that the wallet he was paying had been associated with scam activity, but he proceeded to make the payments anyway. The scam chats show he also asked his wife and his friend to disguise the genuine reasons for their payments in case they got intercepted. He was drawn back into the scam again, after having been shown inconvertible evidence that he had been scammed. • Finally, I’m persuaded that, on balance, no matter what steps Barclays could had taken to stop the payments, Mr C was so in denial and under the emotional control of the scammer, that he would have found new ways to send his funds to them, such as by opening accounts with other payment service providers, or using different receiving accounts, as he in fact did with his last payment from his account with N. • All of the above persuades me that, Mr C would have most likely continued to disguise the genuine reason for his payments and prefer to follow the scammer’s advice over the banks’ for as long as he could. Overall, based on all of the above, I believe that, on the balance of probabilities, Barclays would not have been able to prevent Mr C’s losses, even if it had intervened earlier in the scam. Recovery Finally, I’ve considered whether Barclays did all that it could to recover Mr C’s loss, once it was made aware that he’d been scammed. The payments were made by faster payment to Mr C’s wallet with C. Mr C sent the cryptocurrency to the scammer from there. So, Barclays would not have been able to recover the funds, as none would have remained in the wallet. So, I don’t think it would be fair and reasonable to conclude that Barclays should have done anything more to try and recover Mr C’s funds. My final decision For the reasons given above, I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr C to accept or reject my decision before 25 May 2026. Daria Ermini Ombudsman

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