Our investigation

Micah had authorised the transfer of funds, so the bank was under no obligation to reimburse him for the loss. However, banks have a duty to make inquiries if they suspect a transaction may not be legitimate and warn the customer of the possibility of fraud before processing the transaction. Minutes after the first transfer, the bank’s fraud detection system generated a warning, prompting its financial crime team to call Micah. A member of the team told Micah the bank could still stop the transfer, but Micah confirmed he had authorised the payment and said to proceed with processing it. The bank called again after the second transfer. At this point, Micah explained how he had received a call from someone apparently from the bank who had asked for his help in catching a criminal. Realising he had been scammed, the bank successfully stopped the second transfer. The bank had acted appropriately by calling and warning Micah and ultimately preventing a second loss of funds.

Outcome

We did not uphold Micah’s complaint.