The advert Bethan saw on social media looked real and she liked the featured celebrity, so she signed up to what she thought was a Forex trading platform.
This case study was developed with the help of the Payment System Regulator, to illustrate the FPS and CHAPS reimbursement rules.
What happened
In November 2024, Bethan saw an advert on social media telling her she could make money from Forex trading. It looked convincing and seemed to be promoted by a celebrity, so she responded.
It wasn’t long before she got a call from someone who gave her access to an online trading platform and said they’d act as her account manager.
Over a short period Bethan made several deposits by Faster Payments from her bank – Bank A – to what she believed was the investment company’s account. As she made the deposits, she saw them appear on her ‘trading platform’ account.
After she’d made nine deposits, Bank A blocked the tenth payment. So Bethan transferred money to another account with Bank B.
However, when Bethan tried to transfer £10,000 from her account at Bank B to the investment, the bank called to ask what the payment was for. She explained it was for Forex trading and that the payment was for taxes and fees to allow her access her investment.
As shown in the call recording, Bank B’s fraud team told Bethan, “We believe this is a scam. We are concerned because this person you’re dealing with is asking you to make payments to release your own money.
“This is basically a recovery room scam. These are reported to us all the time. Customers are told an investment is ‘blocked’ somewhere or that you need to pay taxes or fees to the investment platform to release your money. That’s what’s happening on this occasion.”
Bethan told them that, although she hadn’t expected to pay these taxes and fees, she “didn’t care”. She said it was “worth trying” given how much money she “might make”.
Bank B warned her repeatedly that it was concerned she was being scammed. Their fraud team pointed out that a legitimate investment wouldn’t normally require her to make the payment she was being asked to make. If it was a scam, they said, she’d lose the money she was about to pay.
Bethan insisted that she wanted the bank to process the payment and so, in the end, they did.
When her funds were not released, Bethan reported the scam to Bank B.
Assessment under the FPS and CHAPs reimbursement rules
It’s clear that Bank B’s intervention meets the minimum requirements.
It was specific to the consumer, scam and transaction. The quality of the warning was also high. It was interactive and made clear the bank was almost certain the transaction was a scam. It was also agile – responding to what Bethan said and giving her more information to get the point across.
The bank made Bethan aware of the risk she was taking, so we need to consider why she ignored the warning.
The scam was complex and looked real, for example, with the fake celebrity advert and by providing a trading platform. But there’s no evidence of any other social engineering. Firms would need to think about this.
More importantly, Bethan understood the risk of losing all of her money and disregarded it.
We would take other information into account too, for example, what happened with Bank A. However, given these facts, we think it’s likely Bank B would be able to rely on the interventions exception to decline reimbursement.