Santander UK Plc · DRN-5984590

The complaint Mrs W complains that Santander UK Plc (Santander, hereinafter) hasn’t refunded the losses she’s incurred when falling victim to an Authorised Push Payment (APP) impersonation scam. What happened The facts are well known to both parties, so I have outlined the key details. In summary, Mrs W says she was cold called by scammers posing as the police in May 2024. They told her someone in their custody had accessed her bank account, withdrawn her funds and replaced it with fake banknotes. The scammer posing as the police requested Mrs W’s assistance to collect the necessary evidence for their criminal investigation. They first directed her to purchase luxury watches from her local jewellery shop, but none were available, so they then asked her to withdraw cash from her local Santander branch. Over the following two weeks the scammers persuaded Mrs W to draw down money from her investment accounts to purchase gold bars from a genuine gold bullion merchant which she then handed over to a courier sent by the scammers. Mrs W was told someone from her own bank may have aided the criminals and therefore, under no circumstances, she should disclose the genuine reasons of her withdrawal or payments towards the gold merchant. Between May and June 2024 Mrs W made one single in-branch cash withdrawal and eight faster payments to purchase gold bars, totalling a loss of £150,435.60. When the scammer didn’t call Mrs W back to update her on the status of the investigation as they said they would, Mrs W grew more and more concerned and eventually realised she’d been scammed. She reported the scam to Santander on 18 January 2025, but the bank refused to refund her. It said none of the payments were covered by the existing scam reimbursement schemes and that it couldn’t recover any of her funds from the receiving account. It added that Mrs W ultimately authorised all of the payments and that the loss didn’t stem from her bank account as she purchased gold from a genuine merchant, and, therefore, she should report the matter to the police for further assistance. Unhappy with this outcome, Mrs W referred a complaint to the Financial Ombudsman Service. Our Investigator found Santander should have appropriately intervened when Mrs W made the cash withdrawal on 21 May 2024, and if it had, the scam would have been unveiled even if Mrs W had been coached by the scammer, as her cover story would not have stood up to scrutiny. Our Investigator found Mrs W shouldn’t be held liable for her own losses due to the

-- 1 of 8 --

pressures posed by the scammer and her vulnerable circumstances of which Santander was aware. Our Investigator awarded £500 compensation on the basis that the scam impact on Mrs W had been exacerbated by Santander’s actions and inactions. Santander refused to accept this outcome. It argued that: • Its intervention in-branch was proportionate to the risks identified, and Mrs W lied about the genuine purpose of her withdrawal, which prevented it from understanding she was being scammed. • It wasn’t aware of the level of vulnerability Mrs W experienced at the time of the scam, so it could not be held fully liable for the loss on that basis, and a shared liability outcome would be fair in the circumstances. • Mrs W had been educated about scam risks in 2022 when her card was used by unknown third parties for unauthorised transactions, so that education should have informed Mrs W’s actions when she was targeted again by scammers. • The compensation our service awarded for the impact of Santander’s mistakes on Mrs W was unwarranted and not in line with our established approach. In light of this disagreement, I have been asked to review everything afresh and reach a decision on the matter. 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. Santander has questioned the lack of evidence in this case, but I don’t doubt Mrs W has been the victim of a scam here or that she has lost a large sum of money to it. I say this on the basis of how the events were reported to the police and to Santander, showing that Mrs W’s testimony was consistent throughout. I’ve also considered the fact other third parties were involved, such as the local jewellery shop and the gold merchant, details of which were given to our service, adding further credibility to Mrs W’s version of events. Finally, I’ve considered the pattern of payments Mrs W made, her previous financial activity and the evidence as a whole, including the scam reporting call and in-branch notes, and I’m satisfied it’s consistent with that of police impersonation scams, like many others our service has seen. And it is also known that, as victims are targeted by criminals locally, extensive steps are taken by scammers to ensure they can’t be traced, once the scam has been unveiled. So, overall, I’m persuaded Mrs W most likely fell victim to a scam.

-- 2 of 8 --

However, just because a scam has occurred, it does not mean Mrs W is automatically entitled to recompense by Santander. It would only be fair for me to tell Santander to reimburse Mrs W for her loss (or a proportion of it) if: • I thought Santander reasonably ought to have prevented all (or some of) the payments Mrs W made, or • Santander hindered the recovery of the payments Mrs W made whilst ultimately being satisfied that such an outcome was fair and reasonable for me to reach. I’ve thought carefully about whether Santander treated Mrs W fairly and reasonably in its dealings with her, when she made the payments and when she reported the scam, or whether it should have done more than it did. Having done so, I’ve decided to uphold Mrs W’s complaint, and broadly for the same reasons as our Investigator. I’ll explain why. I have kept in mind that Mrs W made the payments herself, and the starting position is that Santander should follow its customer’s instructions. So, under the Payment Services Regulations 2017 (PSR 2017) she is presumed liable for the loss in the first instance. However, I must also take into account that the basis on which I am required to decide complaints is broader than the simple application of contractual terms and the regulatory requirements referenced in those contractual terms. I must determine the complaint by reference to what is, in my opinion, fair and reasonable in all the circumstances of the case (DISP 3.6.1R) taking into account the considerations set out at DISP 3.6.4R. For example, there are some situations when a bank, such as Santander, 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 – Santander 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.

-- 3 of 8 --

Santander told our service that it asked Mrs W to state the purpose of her cash withdrawal when she attended her local branch on 21 May 2024. It also followed its own procedure for high value cash withdrawals and warned Mrs W about the importance of being honest when answering the bank’s questions and to be wary of requests to move her own money to keep it safe. After the withdrawal, Santander sent a text message to Mrs W to warn her about the risks posed by impersonation scams, confirming that the police or the bank would never ask her to withdraw cash to help them with an investigation. When Mrs W made the first payment to the gold merchant on the same day of the cash withdrawal, Santander sent Mrs W a dynamic warning to narrow down the scam risks she may be facing. Mrs W selected that she was making an investment and therefore the following questions were aimed at identifying the hallmarks of investment scams, as opposed to impersonation ones. No further warnings or interventions took place for the remaining scam payments. Was Santander’s intervention proportionate in the circumstances and would it have unveiled the scam? So, I’ve thought about whether Santander’s interventions were proportionate in the circumstances. Having done so, I’m not persuaded Santander did as much as it could and should have done to protect Mrs W from the scam. To come to this finding, I’ve relied on the following considerations. Firstly, Santander has argued that its intervention on the cash withdrawal was proportionate, also on the basis of Mrs W’s past genuine financial activity. It said she’d made high value payments from her account seven and eight months before the scam and that she’d withdrawn cash in the past, and therefore there was no reason for the bank to suspect the withdrawal may be made as part of a scam, especially as Mrs W gave a plausible explanation for it. But I disagree that any of these factors would have excused Santander from conducting a thorough review of the withdrawal and providing a comprehensive warning about the scams associated with requests for cash withdrawals. It’s correct that Mrs W had made a couple of high value payments, but these had taken place much earlier than the events complained about, that I don’t think can be considered in determining what Mrs W’s regular activity from her Santander account looked like at the time of the scam. Moreover, Mrs W only rarely made cash withdrawals, with the highest value withdrawal prior to the scam being only £500. The above factors, coupled with Mrs W’s age and the fact she had reported to Santander to have been called by scammers only five days before the withdrawal, were enough to alert Santander something may not be quite right with Mrs W’s request. Especially, as Mrs W stated that she was going to use the funds towards her son’s wedding, when she could have simply made a faster payment to him from her account and the wedding was allegedly on the following month. This should have come across as even more suspicious to Santander, given some of the evidence suggests Mrs W intended to use the

-- 4 of 8 --

cash to help pay for some of the wedding expenses and not as a gift to her son. In such circumstances a transfer should have been a far more preferable option. As noted by our Investigator, Santander is the industry expert and, as such, it should have known that Mrs W fitted the scam victim profile and that she may have well been instructed to give a cover story by the scammers, as it was in fact the case. Santander’s in-branch notes don’t show Mrs W was asked any further questions other than what the withdrawal was for. Even if Santander’s proforma intervention on high value cash withdrawals shows several prompts, none of the questions or answers have been logged on Santander’s records. And Mrs W has no memory of being questioned by the branch staff at all. So, I can’t conclude that the in-branch proforma intervention was most likely followed on this occasion or that the branch staff’s questions went beyond what recorded on the withdrawal slip. The text message Santander sent to Mrs W was after she’d already been able to withdraw the cash and so, I don’t consider it impactful enough to be able to influence Mrs W’s actions or unveil the scam, as from the moment Mrs W had obtained the cash, the scammer would have ensured to keep in close contact until she had handed it over to one of their couriers. So, based on the above evidence, I can’t conclude that Santander’s intervention was thorough or proportionate. And, on balance, I’m persuaded that, if Santander had probed Mrs W’s cover story further, the scam would have been unveiled. If it had asked to see the wedding invitation or posed more questions about why Mrs W needed to use cash instead of sending money electronically, I believe Mrs W wouldn’t have been able to come up with a plausible explanation, and due to the immense pressure she was experiencing, I think that most likely Santander would have been able to identify that she was being scammed and contact her immediate family or invoke the Banking Protocol if necessary. If it’d done this, I think Mrs W’s scam losses could have been prevented altogether. However, I appreciate that the types of payments involved in this scam vary greatly, so I’ve gone on to also consider Santander’s interventions when Mrs W made the first faster payment towards the gold merchant for £20,000 on 21 May 2024. Having considered all the relevant factors, I’m satisfied that Santander shouldn’t have just intervened via a dynamic written warning, but it should have blocked the payment and held a scam conversation with Mrs W before processing it. I say this because of the size of the payment, which is already per se enough to warrant human intervention, but even more so, in light of the fact Mrs W had been targeted by scammers a few days before and had made a high value cash withdrawal a few hours before. Had Santander asked questions about why Mrs W had all of a sudden decided to buy large amounts of gold, on the same day she was also gathering large amounts of cash, I think it would have become immediately apparent to the bank that Mrs W had sadly been targeted and fallen victim to a scam, especially as I’m not aware that Mrs W had been given a plausible cover story or any cover story at all by the scammer as to why she was buying gold. So I’m satisfied that if Mrs W had been reasonably probed by the bank, her story would have not stood up to scrutiny. Overall, in light of the above, I believe it’s fair to hold Santander responsible for Mrs W’s loss in its entirety. Did Mrs W contribute to her own losses?

-- 5 of 8 --

I’ve thought about whether Mrs W should bear any responsibility for her losses. In doing so, I’ve considered what the law says about contributory negligence, as well as what I consider to be fair and reasonable in all of the circumstances of this complaint, including taking into account Mrs W’s own actions and responsibility for the losses she has suffered. I’ve also taken into account Mrs W’s ability to protect herself from the scam and mitigate her own losses, in light of her age, the loss of her husband and approaching anniversary of his death at the time the scam took place, and the fact she had been recently targeted by another scam, which inherently and statistically made her more at risk of falling victim to one. And on that note, I should mention that when Mrs W reported to the bank that she’d been targeted by scammers, Santander advised her this was likely a sounding out type of call that could lead to a main scam. So, I think it’s fair to say that Santander was on actual notice of Mrs W’s increased vulnerability at that point. I recognise that, as a lay person, there were aspects to the scam that would have appeared convincing to Mrs W, such as the scammer knowing where she lived and that she banked with Santander. It remains unclear whether Mrs W disclosed about her investment accounts or if the scammers already knew about them, but given the localised nature of the scam, it’s plausible to conclude that Mrs W wasn’t just randomly hit by the scam but rather carefully targeted by these criminals. The scammers insisted that Mrs W called Santander using the number on her bank statements so that the bank could corroborate that her account had been compromised and funds had been stolen and moved to an account overseas. Mrs W thinks she used Santander’s genuine phone number, but sadly she was redirected to a scammer impersonating a bank employee, who corroborated the scammers’ story. Whilst it remains unclear how the scammer was able to intercept Mrs W’s outgoing call to her bank, Mrs W’s detailed testimony in that respect shows she was socially engineered by the scammer to believe she was conducting independent checks on the veracity of what they’d just told her by calling Santander directly. And because of Mrs W’s vulnerabilities and personal characteristics, she was unable to identify that she was falling into the scammers’ trap. However, I can see how, from her perspective, this was a turning point for the credibility of the scam, as she was persuaded from that point onwards to be dealing with a genuine police investigation and police officers. She was heavily groomed and pressured to maintain contact with the scammers until the last payment. She was told to keep the scammer on the line in her purse as she approached the jewellery shop and went into the bank’s branch. She was then assisted by the scammer to purchase the gold bars online on her PC. The contact from the scammer, especially on the first day of the scam was so insistent that Mrs W would not have had any respite and sufficient time to think about any red flags. Moreover, the scammer fabricated intricate and sophisticated stories to persuade Mrs W that it was all true, including convincing her that Santander may have been involved in stealing her funds, which ultimately pushed Mrs W to give cover stories for her payments. Mrs W was made to believe that she was crucial part of a live police investigation, and that the conviction of the criminals who’d stolen her money depended on her assistance. It’s been argued by Santander that Mrs W should have confided in her children or a friend at some point during the scam, but the fact she didn’t disclose anything to her family is, in my opinion, testament of her conviction to have been doing the morally right thing, as asked by the authorities.

-- 6 of 8 --

Moreover, I believe the occurrence of Mrs W’s husband’s death first anniversary and the stress she’d been experiencing due to an ongoing car insurance claim will have played heavily on her mind and contributed to her decision to not worry her family further. I’ve given serious thought to Santander’s representations on the matter, but I can’t agree with it that it couldn’t have known the extent to which Mrs W was vulnerable when she walked into branch on 21 May 2024. Santander was aware of Mrs W’s age, that she was recently bereaved, and that she had been approached by scammers five days before – as confirmed by its internal notes. I think this information, taken together, should have informed Santander’s actions on that day and beyond, and prompted it to exercise its duty of care towards a vulnerable customer, by taking more thorough safeguarding steps than it did in this case. Overall, looking at the circumstances of this complaint and Mrs W personal characteristics, I’ve found that it would not be fair or appropriate to attribute any liability to Mrs W for not being able to mitigate her own losses, and I think Santander should be solely responsible for refunding her scam loss. Recovery I have thought about whether Santander could have done more to recover Mrs W’s funds, once it had become aware of the scam. But Mrs W purchased genuine gold bars from a genuine gold merchant, so strictly speaking, she received what she paid for and so there were no grounds to recover her funds from the beneficiary. In the circumstances, I don’t think Santander could have done more to recover Mrs W’s losses. Compensation for the impact suffered Santander has argued that awarding £500 to Mrs W for the trouble and upset its mistakes caused her is unfair in this case, because it was ultimately the scammers’ actions that had a long-lasting impact on Mrs W, and not Santander’s. But I’m not persuaded by this argument. I’d like to be clear that Santander’s shortcomings in this case were grave, and they ultimately actively contributed to Mrs W losing almost the entirety of her life savings to the scam and her mental health and confidence significantly deteriorating, when appropriate intervention from Santander could have prevented the scam altogether. The amount of compensation our service has awarded in this case is symbolic in nature, as, sadly, there is no financial way to put Mrs W in the position she would have been, had she not lost so much money to the scam. But it was recommended to recognise that Santander’s role in the scam, and its refusal to refund Mrs W, furthered the life-changing impact the scam had on a vulnerable consumer, by also making her relive the trauma of what happened over and over as Santander’s and our service’s investigations took place. In particular, I believe the amount of compensation is fair, in light of Mrs W’s personal characteristics and the fact Santander had been put on notice she had been targeted by scammers just before the scam took place, but failed to take this into account when carrying out its fraud prevention interventions.

-- 7 of 8 --

In conclusion, I confirm £500 is a fair and proportionate amount to compensate Mrs W for the trouble and upset caused by Santander’s actions and inactions in this case. Putting things right To put things right, Santander UK Plc should now: • Pay Mrs W £150,435.60 along with 8% simple interest per annum from the date of each payment to the date of settlement* • Pay Mrs W £500 for the trouble and upset Santander has caused her. I consider that 8% simple interest per year fairly reflects the fact that Mrs W has been deprived of this money and that she might have used it in a variety of ways. *If Santander considers that it’s required by HM Revenue & Customs to deduct income tax from the interest I’ve awarded, it should tell Mrs W how much it’s taken off. It should also give Mrs W a tax deduction certificate if she asks for one, so she can reclaim the tax from HM Revenue & Customs if appropriate. My final decision For the reasons given above, I uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs W to accept or reject my decision before 27 April 2026. Daria Ermini Ombudsman

-- 8 of 8 --