Santander UK Plc · DRN-5786491

The complaint Mrs F and Mr M complain that Santander UK Plc (‘Santander’) won’t reimburse the funds they lost when they fell victim to a scam. What happened Mrs F and Mr M hold a joint account with Santander from which the payments I am considering in this case were made. The detailed background to this complaint is well known to both parties. So, I’ll only provide a brief overview of some of the key events here. Mrs F saw an advert on social media about a company I’ll call ‘S’ in this decision. They engaged S to write wills for them and in March 2021 paid S £1,250 for this service. I understand that there was a delay in providing the will and when the matter was raised with S this payment was reimbursed. In October 2022 Mrs F and Mr M paid S £3,850 to prepare lasting power of attorney documents. C visited Mrs F and Mr M at home and introduced investment opportunities that involved trusts in the names of Mrs F and Mr M lending funds to S at an agreed rate of interest. Between 1 November 2022 and 2 February 2023 Mrs F and Mr M made various payments to S by card and cheque amounting to £78,500. They believed all these payments related to various investment agreements. For ease, I have set out in the table below all payments made by Mrs F and Mr M. Payment Date Amount Method 1 29/03/21 £1,250 - reimbursed Debit card 2 19/10/21 £3,850 Debit card 3 01/11/22 £22,500 Cheque 4 01/11/22 £22,500 Cheque 5 15/11/22 £4,500 Debit card 6 15/12/22 £4,500 Debit card 7 21/12/22 £10,000 Cheque 8 21/12/22 £10,000 Cheque 9 02/03/23 £4,500 Debit card Total £82,350 On 1 November 2022 two cheques, each for £22,500 cleared Mrs F and Mr M’s account. Between December 2022 and May 2024 Mrs F and Mr M received returns of £21,786.48 from S. These returns then ceased and Mrs F and Mr M found out that C wasn’t a director of S and that there was no FCA regulation.

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Mrs F and Mr M reported what had happened to Santander and later appointed a professional representative to send a letter of complaint in January 2025. They said that Santander’s systems failed to pick up on usual activity and that had it intervened the scam would have been uncovered. Santander said that Mr M authorised the transactions and it wasn’t liable for any financial loss. Santander went on to say that as the payments were made by card and cheque, the Contingent Reimbursement Model Code (‘CRM Code’) doesn’t apply. Mrs F and Mr M were unhappy with Santander’s response and brought a complaint to this service. The investigator who considered this complaint recommended that it be upheld in part. She said that when the first cheque payment was made Santander ought to have recognised a potential risk of harm and asked Mrs F and Mr M questions about it and provided investment scam warnings. Had it done so, red flags would have been highlighted, and Mrs F and Mr M would have taken additional steps which would have prevented their loss from that point. Santander didn’t agree with the investigator’s findings and requested a decision, so Mrs F and Mr M’s complaint was passed to me to review. I agreed with the investigator’s overall findings but felt that the redress had been miscalculated, so I issued a provisional decision. In the “What I’ve provisionally decided - and why” section of it I said: “In deciding what’s fair and reasonable, I am required to take into account relevant law and regulations; regulators’ rules, guidance and standards; codes of practice and, where appropriate, what I consider to have been good industry practice at the time. In this case the payments were made by card and by cheque, so the provisions of the CRM Code don’t apply. And a cheque is a written order from an account holder, instructing their bank to pay a specified sum of money to a named recipient. A cheque is not considered a payment service under the PSRs, so the provisions of those regulations do not apply to this type of payment. At the time Mr M made the payments I consider it fair and reasonable that Santander should: • have been monitoring accounts and any payments made or received to counter various risks, including 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 firms are generally more familiar with than the average customer; • in some circumstances, irrespective of the payment channel used, have taken additional steps, or made additional checks, or provided additional warnings, before processing a payment. I have considered the activity on the account to determine if Santander ought reasonably to have done more when the payments were made. I’m unclear if the power of attorney the £3,850 payment related to is legally valid. I think it likely was as solicitors appear to have dealt with it. Given that I don’t think Santander ought reasonably to have had any concerns when this payment was made (as I will discuss below) I don’t need to make a definite finding on this point. I think Santander acted reasonably in processing the first two transactions, which were broadly in line with usual account activity. In any event, both payments appear to have been used for legitimate purposes). I also note that the first payment of £1,250 was subsequently returned by S. But I think the position changed when the first cheque for £22,500 was processed. This was significantly greater than any other payment in the 12-month period before it. Prior to this

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cheque, the highest value payment on the account was for a little over £5,000 to a beneficiary that seems to relate to a job at Mrs F and Mr M’s home. Whilst Mrs F and Mr M had paid S before, the amounts were significantly lower. As Mrs F and Mr M were paying by cheque, there was an opportunity for Santander to pause and speak to one of the account holders before processing it. So, I think Santander should have intervened and asked questions about, for example, the reason for the payment, the nature of the investment, how they found out about it, FCA regulation, expected returns and documentation. I’ve gone on to consider what I think is most likely to have happened if Santander had asked the kind of questions I think it should have. I have seen nothing to suggest that Mrs F and Mr M wouldn’t have been honest. They weren’t given any kind of cover story and had no reason to mislead Santander. I’m satisfied that if Santander had intervened and asked probing questions the scam would have been uncovered and Mrs F and Mr M’s further loss prevented. S was a company involved in funeral and related services and was not FCA registered. C claimed to be FCA registered, but this wasn’t true. C also resigned as a director of S in 2020, and the company was filing accounts for a dormant company from January 2021. Whilst Mrs F and Mr M thought they had a trust, I think they would have struggled to explain exactly what they were investing in. I note in their 2025 letter of complaint Mrs F and Mr M said they were unsure what the investment fund was investing in. So I think if Santander had spoken to Mrs F and Mr M clear red flags would have been raised which would have led to additional checks being made. Ultimately, I don’t believe Mrs F and Mr M would have proceeded with the investment. In considering whether Mrs F and Mr M should bear any responsibility for their loss, I’ve taken into account what the law says about contributory negligence as well as what’s fair and reasonable in the circumstances of this complaint. On balance, I’m not persuaded that it would be fair to make a deduction here. This was a convincing and sophisticated scam perpetrated by an individual who was later banned from being a director of a company for 14 years due to his dealings with another company. Mrs F and Mr M initially approached S about providing a will and that service was provided. C had also provided power of attorney documents and built a level of trust with Mrs F and Mr M. They were then contacted by C about an investment opportunity with S. C visited them at home numerous times and provided convincing looking brochures and documents. They also contacted S’s office and looked at information about S online and on social media. Overall, I think Santander could have prevented Mrs F and Mr M’s losses from payment three so I provisionally think it should reimburse their loss from this point (£78,500) minus the returns they received (of £20,563.48 – which doesn’t include £1,250 which S refunded). As Mrs F and Mr M have been deprived of the funds, Santander should also pay interest as set out below.” Responses to my provisional decision Mrs F and Mr M accepted my provisional decision, but Santander did not. It said the cheques were reviewed at the time and cleared by its fraud team and as Mrs F and Mr M were paying a legitimate company and the name and signature matched, it didn’t have any concerns. 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.

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I have carefully considered Santander’s response, but my final decision is the same as my provisional decision, and for the same reasons. In summary, there was a substantial change in the activity on the account that warranted a discussion about the purpose of the payment. Mrs F and Mr M were paying a huge amount to a company related to funeral services. Had Santander intervened appropriately I think the red flags I have identified above would have come to light and Mrs F and Mr M’s loss prevented. So, I think Santander should reimburse their loss from this point and add interest to reflect the fact they have been deprived of these funds. My final decision For the reasons stated, I uphold this complaint and require Santander UK Plc to: - Reimburse Mrs F and Mr M’s loss from the first £22,500 cheque onwards less the returns they received. I calculate this figure to be £57,963.52. - Pay interest on the above amount at the rate of 8% simple per year from the date of each transaction to the date of settlement, less any tax that is lawfully deductible. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs F and Mr M to accept or reject my decision before 20 April 2026. Jay Hadfield Ombudsman

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