Metro Bank Plc · DRN-6256064

The complaint Ms J complains that Metro Bank Plc (Metro) won’t refund the money she lost when she fell victim to an investment scam. Ms J is represented in this complaint, but I’ll refer to her as it’s her complaint. What happened 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. Ms J was feeling vulnerable as she worried about job security. On or around December 2024, she was attracted to a fake investment opportunity on social media that was endorsed by a well-known celebrity, and a link took her to an investment company website. After expressing an interest, she was subsequently contacted by Person F (a scammer) who introduced themselves as an investment advisor and said (scam) Company O used an AI algorithm and advised her to invest in commodities, foreign exchange and crypto. Person F befriended Ms J and persuaded her that she could make high profits and to pay a small fee to set up an investment account, which had a professional looking platform, saying she would help her by managing her account. To fund the investment, Person F persuaded Ms J to take out several loans. Person F also persuaded her to open accounts with Metro and a foreign exchange business (Firm B) so she could, in stages (to avoid intervention), move the loan money received into her bank accounts. Ms J paid the scammers by sending international payments from her new Metro account to Company F and Company C (an overseas bitcoin exchange who she appears to have had an account with): Payment Number Date Payment Method Payee Amount 1 14/1/25 International payment Company F £10,000 2 16/1/25 International payment Company F £2,998 3 5/2/25 International payment Ms J’s account with Company C £9,000 4 7/2/25 International payment Ms J’s account with Company C £10,000 5 7/2/25 International payment Ms J’s account with Company C £5,000 Total £36,998 Ms J wasn’t able to withdraw her profits to reinvest and when she noticed some concerning reviews on a trust site, she was told that they were disgruntled investors. Ms J realised it was a scam when she tried to make a withdrawal when her trading account reached USD 54,000 and she became suspicious about a requirement to pay a very high liquidation fee and her enquiries found it to be fake.

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Ms J complained to Metro seeking a refund of her payments as she considers that inadequate warnings contributed directly to her financial loss. Metro rejected her claim saying they did give warnings and her claim ‘fell outside the scope of the APP scam reimbursement policy, both under our internal policy and the Payment Systems Regulator’s guidance’. Ms J escalated her complaint to our service, adding that Metro was uncaring when she reported the scam. Our investigator considered that Metro should’ve implemented a human intervention. But, based on call recordings from Bank H, who were involved in the payment trail and did intervene, she didn’t think this would’ve prevented her loss. Ms J disagrees and when asking for an Ombudsman to make a final decision pointed out that: o Fraudsters routinely coach victims to provide plausible backstories, and banks should be aware of this. o ‘Meaningful, targeted, risk-based intervention by Metro Bank would likely have changed the outcome and it’s unreasonable to conclude that Metro's intervention would have been ineffective. A timely warning could have prevented the loss’. o ‘Metro Bank had clear risk indicators and a duty under the CRM Code to provide a meaningful, tailored intervention. Had it done so, the evidence suggests our client would likely have acted differently, avoided the payment, and prevented her loss’. I issued a provisional decision on 12 March 2026, and this is what I said: I’ve considered the relevant information about this complaint. My provisional decision is different to the outcome of that reached by our investigator. So, I’d like to give both parties a further opportunity to respond. The deadline for both parties to provide any further comments or evidence for me to consider is 26 March 2026. Unless the information changes my mind, my final decision is likely to be along the following lines. If Metro Bank PLC accepts my provisional decision, it should let me know. If Ms J also accepts, I may arrange for the complaint to be closed as resolved at this stage without a final decision. What I’ve provisionally 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. Having done so, my provisional decision is different to our investigator’s view. I’m partially upholding this complaint, and I’ll explain why. I should first say that: • I’m very sorry to hear that Ms J has been the victim of this cruel investment scam and lost a significant amount of money here. • I’ve carefully considered all the points Ms J and Metro have made and I’ve focused on what I think are the important points to reach a final decision. • In making my findings, I must consider the evidence that is available to me and where evidence is incomplete, inconsistent or contradictory, I must reach my

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decision on the balance of probabilities – in other words, what I consider most likely to have happened in light of the available evidence and wider circumstances. • I’m satisfied that the APP Scam Reimbursement Rules, introduced by the Payment Systems Regulator in October 2024, for customers who have fallen victim to an APP scam, don’t apply as the funds were transferred by international payments. • I’m satisfied that Metro made reasonable efforts to recover Ms J’s funds. However, this wasn’t possible as the scam wasn’t reported immediately, payments were international and via a crypto exchange and unfortunately her funds would’ve been immediately taken. • The Payment Services Regulations 2017 (PSR) and FCA’s Consumer Duty are relevant here. PSR Under the PSR and in accordance with general banking terms and conditions, banks should execute an authorised payment instruction without undue delay. The starting position is that liability for an authorised payment rests with the payer, even where they are duped into making that payment. There’s no dispute that Ms J made the payments here, so they are considered authorised. However, in accordance with the law, regulations and good industry practice, a bank should be on the look-out for and protect its customers against the risk of fraud and scams so far as is reasonably possible. If it fails to act on information which ought reasonably to alert a prudent banker to potential fraud or financial crime, it might be liable for losses incurred by its customer as a result. Banks do have to strike a balance between the extent to which they intervene in payments to try and prevent fraud and/or financial harm, against the risk of unnecessarily inconveniencing or delaying legitimate transactions. So, I consider Metro should fairly and reasonably: o Have been monitoring accounts and any payments made or received to counter various risks such as anti-money laundering and preventing fraud and scams. o Have systems in place to look 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 banks are generally more familiar with than the average customer. o In some circumstances, irrespective of the payment channel used, have taken additional steps, or made additional checks, before processing a payment, or in some cases declined to make a payment altogether, to help protect customers from the possibility of financial harm from fraud. Consumer Duty Also, from July 2023 Metro had to comply with the Financial Conduct Authority’s Consumer Duty which required financial services firms to act to deliver good outcomes for their customers. Whilst the Consumer Duty does not mean that customers will always be protected from bad outcomes, Metro

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was required to act to avoid foreseeable harm by, for example, operating adequate systems to detect and prevent fraud. With the above in mind and noting Metro’s confirmation that they did give automated warnings (although they can’t evidence these), which would’ve been general (and therefore unlikely to resonate with Ms J) because Ms J stated she was paying an invoice rather than making an investment, I considered: Whether Metro should’ve identified that Ms J was at risk of financial harm and put in place stronger human interventions before releasing any of the five payments, Payments 1,3 and 4 (for £10,000, £9,000 and £10,000 respectively) were all large amounts. Also, the account was newly opened, Metro had limited information on typical account activity, the credits to pay businesses were coming from one of her other bank accounts and these were international payments. So, I think there were several risk factors for these payments and Metro should’ve known that scams frequently involve victims being told to open new accounts, make multi-stage and international payments. Considering all the risk factors, I think a human intervention, where a fraud and scam agent could probe to provide relevant education and warnings and look to detect a fraud or scam, would’ve been proportionate here. Having established the type of intervention I would’ve expected to see at payment 1, 3 and 4, I then considered whether such interventions would’ve either uncovered the scam or prevented Ms J from making further payments. Our investigator didn’t think a human intervention would’ve made any difference. This is because she listened to Bank H’s two intervention calls and found Ms J wasn’t honest on either call as: • On 14 January 2025, she told the agent the transfer was for home improvements. • On 20 February 2025, she told the agent she wasn’t sending funds for investment purposes. However, following my analysis of these two intervention calls, I have a different view to that of our investigator and, although I can’t be certain, on balance of probabilities, I think that effective human interventions on the very first payment would’ve unravelled the scam and prevented Ms J’s loss. I say this for the following reasons: A. I think it more likely than not that the coaching Ms J received was light and that she found lying very difficult. Therefore, she would’ve struggled when answering probing questions, and have appeared suspicious, as Metro could see risk indicators including incoming payments from another bank and labelling that appeared not to match the companies she was paying. B. This is because when Ms J: o Was asked why she was making two separate payments rather than one, she sounded hesitant, first saying she didn’t know and then indicating it was because the bank might think it to be fraud. o Was asked whether anyone had told her to lie, she first said ‘no’ and then added ‘but it’s my money’. o Was asked the purpose of the multi-currency account she had opened with a financial firm she first sounded defensive saying it was personal and then gave an unclear and confusing explanation. o Spoke about the financial firm she made a point of saying it wasn’t for crypto but continued to talk about how the firm was crypto friendly and

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then rather oddly started to recommend crypto investments to the agent. C. I think Metro fraud and scam agents would’ve first asked Ms J about the reason why she was paying the companies and, due to the name of the first company, I think it more likely than not that she would’ve received some light coaching and been told to say it was for an investment but one she had found herself and carefully researched. And this would’ve led to: o Probing questions being asked, as the role of a fraud and scam agent is to flesh out the details to break through any spell cast by very clever and sophisticated fraudsters, as victims are often coached into giving cover stories, as was the case here. o The following type of probing questions being asked – how she came across the company, whether anyone was helping her such as an adviser or broker, what the returns were, what research she had done, how she could withdraw and whether anyone had told her what to say or to lie – and, based on Ms J’s bullet point A Bank H answers, her using the word ‘home’ and ‘home improvements’ in her labelling (that would’ve likely been noticed) and her lack of research and knowledge an agent would’ve become very suspicious. o Educational information being given, with an agent bringing to life how investment scams work, including scammers’ introductions, offers that are too good to be true, fake profit screens, coaching including telling lies to a bank and giving no paperwork that can be verified or control of an account. o A quick basic search of the company would then be conducted. For Company F a Companies House check would’ve on 14 January 2025 (payment 1): Shown - 07 Jan 2025, Application to strike the company off the register Possibly shown - 14 Jan 2025, First Gazette notice for voluntary strike o Strong warnings being given that Ms J was likely being scammed and would probably lose all her money. So, although I think it more likely than not that Ms J would’ve continued to be untruthful at the start of the call, on balance, I think a skilled fraud and scam agent, undertaking the actions in bullet point C would’ve been able to unravel the scam. That being the case, I’m persuaded an effective intervention and warning from Metro would’ve likely prevented Ms J’s loss. It’s then fair and reasonable to say Metro ought to now compensate Ms J for that loss. I then looked at: Contributory negligence In considering this point, 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. The concept of contributory negligence centres around whether or not a consumer should have done something to mitigate their losses or should share some responsibility for them. Although I recognise how clever scammers are and in no way blame Ms J for being scammed, I think she should’ve been more diligent before making the payments. I say this because: • I can’t see that she completed due diligence on the investment company

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including requesting documentation to confirm their legitimacy. • As mentioned above, a Companies House check on the payee would’ve shown Firm F was being struck off. • She disregarded Bank H’s warnings including ‘only a scammer will tell you to lie’ and by not being truthful she prevented them helping her. • She should’ve seen the high returns as too good to be true. Service Finally, I noted Ms J’s comments that Metro’s response was uncaring, and I’ve seen dialogue between Ms J and Metro that doesn’t support this. In order for me to look at this, I would need to see that she raised this in her complaint with Metro together with evidence that supports her comment. Putting things right Having considered all the above, I think both the business and customer are equally at fault here. Metro should’ve put in place human interventions, which would’ve likely unravelled the scam, and Ms J should’ve been more diligent. So, I think it is only fair and reasonable for liability to be shared from payment 1. So, my provisional decision is to partially uphold this complaint, and I require Metro to: • Provide Ms J with a refund of 50% of her loss, which is £18,499. • Pay 8% simple interest on this amount from the date of each payment to the date of settlement. My provisional decision For the reasons mentioned above, my provisional decision is to partially uphold this complaint against Metro Bank Plc, and my requirements are detailed in the above putting things right section. This is subject to any comments that either Metro Bank Plc or Ms J may wish to make. These must be received by 26 March 2026. 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. Further to my above provisional decision, both parties responded to say that they agreed with it. So, as they both agree, my view remains the same. I therefore adopt my provisional decision and reasons as my final decision. Putting things right To put things right, I require Metro Bank Plc to: • Provide Ms J with a refund of 50% of her loss, which is £18,499. • Pay 8% simple interest on this amount from the date of each payment to the date of

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settlement. My final decision For the reasons mentioned above, my final decision is to uphold this complaint against Metro Bank Plc, and my requirements are detailed in the above ‘Putting things right’ section of this decision paper. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms J to accept or reject my decision before 23 April 2026. Paul Douglas Ombudsman

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