HSBC UK Bank · DRN-6323147

The complaint Mr S and Mrs S complain that HSBC UK Bank Plc won’t refund the full amount of money they say they lost to a scam. As Mr S invested the money, the complaint will mostly refer to him throughout this decision. What happened The background to this complaint is well-known to both parties, so I won’t repeat it in detail here. But in summary and based on the submissions of both parties, I understand it to be as follows. Mr S complains that he sent several payments to what he thought was a legitimate investment. Shortly after making the payments, he realised he’d been scammed when the shares he purchased lost most of their value. So, he logged a complaint with HSBC. HSBC looked into the complaint but didn’t uphold it. It said it wasn’t the point of loss, as Mr S sent the money to a legitimate share dealing platform to an account in his name – so there was no cover under the reimbursement scheme. Mr S remained unhappy. So, he brought his complaint to our service. Our investigator looked into the complaint but didn’t uphold it. She found that Mr S purchased legitimate shares and the money didn’t end up with a scammer. Mr S didn’t agree with the investigator’s view. In summary, he said he had fallen victim to a “pump and dump” scam and should be reimbursed by HSBC. As no formal agreement could be reached, the complaint has been passed to me for a final decision. 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 significant part 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. Just because a scam may have occurred, it does not mean Mr S and Mrs S are automatically entitled recompense by HSBC. It would only be fair for me to tell HSBC to reimburse Mr S and Mrs S for their loss (or a proportion of it) if: I thought HSBC reasonably ought to have prevented all (or some of) the payments Mr S made, or HSBC hindered the recovery of the payments Mr S made – whilst ultimately being satisfied that such an outcome was fair and reasonable for me to reach.

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I’ve thought carefully about whether HSBC treated Mr S 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 S’s complaint. I know this will come as a disappointment to Mr S and Mrs S and so I will explain below why I’ve reached the decision I have. I have kept in mind that Mr S made the payments himself and the starting position is that HSBC should follow its customer’s instructions. So, under the Payment Services Regulations 2017 (PSR 2017) he is presumed liable for the loss in the first instance. I appreciate that Mr S did not intend for his money to be lost – but he did authorise these payments to take place. 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. Mr S has mentioned the PSR reimbursement scheme several times in his submissions to our service. Although I have considered it carefully, here I’m convinced the evidence shows the payments were sent to another account in Mr S’s name and control, so I’m satisfied this scheme wouldn’t apply as these types of payments are excluded. It follows that I don’t find HSBC have acted unfairly by refusing the claim on these grounds. Although Mr S has given me his interpretation of how the scheme ought to cover his circumstances, I’m not convinced these mean that a claim by HSBC should be reconsidered or was incorrect in the first place, based on what I’ve said above. Although the people Mr S was being advised by may have recommended using the platform, this doesn’t change the fact the account was opened by Mr S and in his name. There are other considerations I must take into account though. 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 - HSBC 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. So, I’ve thought about whether the transactions should have highlighted to HSBC that Mr S might be at a heightened risk of financial harm due to a fraud or scam. Here I find some of the amounts did reach a value that ought to have concerned HSBC that Mr S could be at risk from financial harm. Here HSBC did intervene and speak to Mr S and he explained he was buying shares through a third-party platform. He checked the platform was registered on the Financial Conduct Authority (FCA) and after the advisor gave Mr S some general investment

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warnings, allowed the payment to be made. It’s worth highlighting that Mr S wasn’t paying a third party or intending to use his trading account as an intermediary to move the funds on to a third party, as is common with investment scams. Mr S has said that he thinks the platform may have been involved in the scam but hasn’t supplied evidence that in my view confirms this. The website is still trading and is still showing as being regulated by the FCA. Mr S has also now said he didn’t have control of the account at the time the payments were made but has not supplied any evidence to support this. This also contradicts what he told the HSBC advisor on the call when he said he did have control of the account, he set up the account and he was requesting the payments from the share dealing website. So, I find it most likely Mr S did have control when the payments were made and he bought shares, notwithstanding the issues he may now be having with getting access to these shares. Based on these circumstances, it would have been difficult for HSBC to identify that there was anything suspicious about what Mr S was doing or that he was at risk of financial harm. Even if HSBC had intervened again or asked further questions, I’m not convinced it would have been concerned enough to prevent the payments from being made. I accept there were some common hallmarks of an investment scam, such as the investment advisor communicating through a messaging service. However, it’s possible that a legitimate financial advisor might also exhibit these types of behaviour and so alone, these aren’t enough to say HSBC ought to have been concerned by Mr S’s payments. From my research and from Mr S’s testimony, the investment appears to have been exposed as a ‘pump and dump’ when the shares began to lose most of their value at close on 26 June 2025, 1 day after Mr S made his final payment. So again, if HSBC had encouraged further research or carried out any of its own when speaking to Mr S, this would not have been something it found, as it had not happened yet. So, even if Mr S had been questioned in more detail about the investment by an advisor, I don’t think it would’ve highlighted anything that would have caused concern or led HSBC to believe Mr S was at risk of financial harm from a fraud or scam. Furthermore, even if HSBC did intervene again and tell Mr S to conduct further checks on his investment, I’m not persuaded he would have found any negative information online, as Mr S has not supplied anything from that point in time that shows this might have been a scam. Taking into consideration all the available evidence and arguments, I’m not persuaded any proportionate questioning throughout the investment would have created enough doubt for Mr S that he would not have gone ahead with the payments, such was his belief that he was sending money for the purpose of a genuine investment opportunity. I appreciate Mr S has highlighted other cases investigated by our service. I must highlight that each case is dealt with on its own individual merits. Recovery I’ve also looked at whether HSBC took the steps it should have once Mr S contacted it to dispute the payments. After the payments were made, I couldn’t reasonably expect HSBC to have done anything

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further until Mr S alleged that he had been scammed. As the company Mr S sent the money to is a legitimate trading platform, and Mr S went on to buy shares, no recovery would be possible. The platform provided the service intended and the money has been lost due to the drop in value of the shares. I realise this means Mr S and Mrs S are out of pocket. And I’m sorry they lost this money. But I think this was ultimately caused by the scheme Mr S invested in, and not HSBC. I can’t reasonably ask HSBC to reimburse Mr S in circumstances where I don’t think it ought to have prevented the payments, reimbursed or recovered them. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S and Mrs S to accept or reject my decision before 26 May 2026. Tom Wagstaff Ombudsman

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