Customer persisted with transfers to scammers despite bank warnings

Common scams targeting bank customers,
In 2021, Samuel was approached by someone on Instagram about an investment opportunity. Samuel was interested, and on the advice of the Instagram contact, bought bitcoin from legitimate cryptocurrency merchants using his Visa debit card. The payments were authenticated by text code. Samuel then transferred bitcoin from his bitcoin wallet to the wallets of the Instagram contact.
October 2022

Samuel became worried he was being scammed and phoned the bank to dispute the transactions. The bank blocked his debit card for him and warned him about dealing with anyone about whose authenticity he had any doubts.

Several days later, Samuel removed the block using the bank's self-service channel and made several more bitcoin purchases and then passed the bitcoin on to other people. Four days later, he rang the bank to dispute these latest transactions. The bank cancelled the card and told him it could not guarantee it could reverse the latest transactions. However, it contacted the cryptocurrency merchants to see if the transactions could be reversed. 

A week later, Samuel made another bitcoin purchase using another Visa debit card. Several days later Samuel called the bank for an update on its attempt to recover the losses from the earlier transactions. At this point, the bank noted the recent transaction, and Samuel said he had received a message he thought came from a bitcoin site and followed the links to enter his banking information.  Shortly afterwards, the bank advised Samuel it had not been possible to recover his funds. 

Samuel complained that the bank should have been monitoring his account and the accounts of the recipients of his funds. He also said the bank should have been able to identify the transfer of funds from his bitcoin wallet to the wallets of others. He sought reimbursement of his losses of $10,000. The bank agreed to reimburse the final transaction of $500 on a goodwill basis.    

Our investigation

Samuel had authorised the purchases using his Visa debit card and authenticated the payments through text codes, so he had no rights under Visa rules to seek a chargeback. We found nothing to suggest the bank should have known he was being defrauded before he called it for the first time. The bank had helped him block his card and warned him about scams – an appropriate response, in our view. Despite the warnings, Samuel continued to buy bitcoin and transfer it to the scammers, so the bank could not be liable for subsequent purchases. We also told Samuel that banks could not identify transfers of funds between bitcoin wallets as such transactions take place outside of the banking system. 


We did not uphold Samuel’s complaint, whereupon Samuel accepted the bank's offer of $500.

Print this page