Bank breached own policy by failing to ask about purpose of payment

Categories:

Fraud & scams, Payment method,

Summary:

In July and August 2025, Lucas made three international money transfers totalling $95,000 to a bank in Luxembourg for what he believed was a cryptocurrency investment. The first payment triggered the bank’s fraud detection system, and the bank called Lucas. During a short call, the bank confirmed that Lucas was indeed the one making the payment. Lucas subsequently complained that the bank should have asked more questions during the call and warned him about the risk of a scam.

Published:

April 2026

Our investigation

The bank did not ask Lucas about the purpose of the first international money transfer during the call, and in failing to do so, it breached its own policy (which was in line with good industry practice). This meant the bank did not respond appropriately to the alert that had prompted the call.

We then looked at what would probably have happened if the bank had asked about the payment’s purpose, and we concluded that Lucas would have answered openly and honestly. The bank would then have known he was sending money for a cryptocurrency investment. In those circumstances, we would have expected the bank to warn him about the risk of an investment scam.

Lucas had the primary responsibility for checking the legitimacy of the recipient and the investment. However, the bank could have done more to protect him.

The bank offered Lucas $47,500, half of his loss.