Starling Bank Ltd · DRN-6282033

The complaint Miss C complains that Starling Bank Ltd unfairly refuses to refund her all the money she lost in a safe account scam. What happened The circumstances surrounding Miss C’s complaint are well known to both parties, so I will not set them out in detail here. Instead, I’ve summarised what I consider to be the key points. In December 2025, people impersonating Starling contacted Miss C and persuaded her that fraudulent transactions were being attempted on her account and she needed to move money from her Starling account to a ‘safe account’. Miss C was persuaded the callers were genuinely acting on behalf of Starling, so Miss C followed their instructions and made two payments from her Starling account to an Electronic Money Institution (EMI) as follows: Date and Time Amount Payment type Destination 08/12/2025 18:28:27 £1,200 Debit card payment EMI account in own name 08/12/2025 19:43:33 £2,000 Debit card payment EMI account in own name Miss C says she was told the payments would be refunded the next morning, so when the payments were not refunded, Miss C realised she had been scammed and she contacted Starling. Starling refunded her the full amount of the second payment, but it did not refund the first payment. Miss C says Starling has not handled her claim well, with delays and inconsistent explanations. She considers Starling is being inconsistent by refunding one transaction but not the other, since the circumstances in which the payments were made were identical. Starling says both payments were authorised but it considers it could have done more on the second transaction. It says by the time Miss C made the second transaction it considers it should have contacted Miss C and asked her questions about the payment and if it had done so, the scam might have been uncovered and her further loss prevented. It refunded the second transaction and paid Miss C £100 to compensate for its handling of her claim for reimbursement. However, it doesn’t think there was anything suspicious about the first payment and doesn’t think it made any error by following Miss C’s instructions to make the payment.

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Miss C’s complaint was considered by one of our Investigators, but he didn’t recommend her complaint should be upheld. He found that Miss C had approved the payments, even though she didn’t intend for her money to go to scammers. He said he wasn’t persuaded the payments were sufficiently suspicious that Starling ought to have intervened to ask questions about the payments. He found the payments were relatively low value, for different amounts, they weren’t made in quick succession, but an hour or so apart and were not clearly part of a known pattern of fraudulent activity. He didn’t think Starling had done anything wrong by allowing the payments, since they had been authenticated and they weren’t suspicious. In terms of recovering Miss C’s money, he didn’t think there was a reasonable prospect of success because the payments had been made by debit card to a legitimate merchant and so any chargeback claims would likely have been defended by the merchant. Overall, he thought Starling’s offer to refund the second transaction, along with a payment of £100 compensation was fair and he did not recommend anything further. Miss C didn’t accept the Investigator’s conclusions and asked for an ombudsman’s decision. In summary, she said she didn’t accept that the payments should be treated as authorised due to the circumstances in which the authorisation was obtained, including impersonation, deception and sustained pressure. She also said she didn’t think a clear explanation had been provided about why the two payments had been treated differently. She considers the two payments had been unusual and ought to have resulted in intervention from Starling. 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. Having done so, I’m not upholding Miss C’s complaint. While I understand this will come as a disappointment to Miss C and I am conscious of the impact this cruel and distressing scam has had on her, I’m not persuaded that I can fairly conclude that Starling is responsible for her loss. I’ll explain why. In broad terms, the starting position is that Starling is expected to process payments and withdrawals that a customer authorises it to make, in accordance with the accounts terms and conditions and with the Payment Services Regulations (PSRs). Miss C says she does not dispute that she approved the two payments in the Starling app. She does dispute that this should be considered as authorisation of the payments, due to the pressure and deception present in her complaint. Having considered this carefully, I find that both payments were authorised. I understand Miss C’s point that she was led to believe that her money would be returned to her the next day. But the issue here is that Starling was entitled to regard these two payments as having been authorised, in accordance with the account terms and conditions and the PSRs, because Miss C authenticated the payments. She says she did so by entering one-time passcodes in the app, that she had been given by Starling and she used them to approve the payments to the EMI. I have given consideration to the context in which Miss C authenticated the payments. I accept that she had been deceived about the reasons for the payments, but she did know she was approving the two payments, the amount of the payments and their destination. The fact that she was tricked into doing so does not change the fact that under the PSR’s and the account terms and conditions, these payments were authorised by Miss C. By taking steps to authenticate the payments Miss C represented to Starling that the payment instruction was genuine and I think Starling was entitled to rely on that when making the payments. While I fully understand Miss C was tricked into authenticating the payments, that isn’t a consideration under the rules, so these were authorised payments under the PSRs.

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That isn’t the end of my consideration though. I’ve taken into account the regulator’s rules and guidance; relevant codes of practice, along with what I consider to have been good industry practice at the time, amongst other things, when deciding what is fair and reasonable in all the circumstances of Miss C’s complaint. I’ve considered whether the payments are covered by the APP scam reimbursement (ASR) rules, but I’m satisfied they are not because those rules don’t cover card payments. I do consider Starling should have been on the lookout for the possibility of Authorised Push Payments scams (amongst other things) at the time, and intervened if there were clear indications its customer might be at risk. Starling does have a difficult balance to strike in how it configures its systems to detect unusual activity that might indicate its customers are a higher risk of fraud. It would not be reasonable or possible for Starling to intervene in every transaction it processes. I would expect intervention to be proportionate to the circumstances of the transaction. Having considered everything, I do not consider that either payment would have looked sufficiently suspicious that Starling ought reasonably to have intervened and asked questions about them. The two payments were not so large that they would have stood out as representing a particular risk, in my view. They were being made to a new payee, which might increase the risk they represented and that payee was an account with a business specialising in international money transfers, which might also represent an additional risk factor. But there were only two payments, they were not made in quick succession, and they were not of a particularly high value. While two payments were made to the same payee on the same day, I don’t consider that those two payments amounted to a clear pattern of fraudulent transactions. Had additional payments been made, perhaps minutes apart, rather than more than an hour apart, this would have more closely matched other fraud patterns. Overall, considering everything, the payments don’t appear concerning enough that I would be persuaded to conclude that Starling ought reasonably to have intervened. Miss C says Starling has not sufficiently explained why it has refunded one payment but not the other. I disagree. While I have concluded that the risk factors were not sufficient for Starling to have intervened, on either payment, Starling took a different view, as it was entitled to, and decided that it should have asked questions when Miss C attempted to make the second payment and therefore it decided to refund Miss C. The reason why the first payment wouldn’t have looked as suspicious as the second is because a one-off payment is often regarded as less suspicious than a series of payments to the same payee. Common fraud patterns often involve a series of payments, rather than a single payment, often made in quick succession, so Starling’s view that the second payment to the same payee on the same day should have led it to take action can be clearly distinguished from the first payment, which would have looked less suspicious being an isolated payment. In terms of Starling’s response to Miss C’s request for a refund, Starling issued a letter setting out the outcome on 19 December 2025, within ten days of being notified about the scam. It had asked Miss C for some information and had asked her to liaise with her other bank but overall, it seems to me that it investigated her concerns promptly and it set out its position within a reasonable amount of time. I don’t find it gave confusing or contradictory explanations for its decision. It explained why it was refunding one payment but not the other and it addressed her concerns about its overall handling, offering to pay her £100. While Miss C doesn’t agree with Starling’s position in relation to her claim for a refund, I do not consider it handled her fraud claim poorly.

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My final decision I don’t uphold Miss C’s complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss C to accept or reject my decision before 26 May 2026. Greg Barham Ombudsman

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