Lloyds Bank PLC · DRN-6232664

The complaint Mr M on behalf of M complains that Lloyds Bank PLC will not reimburse the funds it says it lost as a result of a scam. M is professionally represented, but for ease I have only referred to M and Mr M in this decision. What happened The background to this complaint is well known to both parties so I won’t repeat it in detail here. Mr M is the director of M and between December 2023 and May 2024 he made several payments totalling approximately £28,000 from M’s business account towards what he thought was a genuine investment opportunity. Mr M purchased cryptocurrency from an exchange platform before sending the funds on to the scam platform. M later reported the matter to Lloyds but it did not uphold the complaint. Our Investigator found that the funds withdrawn from M’s account were for Mr M’s personal investment and not business-related purposes. She concluded that M had not sustained the loss, but Mr M has in his personal capacity. As such, the investigator did not think it would be fair or reasonable to ask Lloyds to refund the money to M. M did not accept the Investigator’s conclusion and asked for the complaint to be reviewed by an ombudsman. In summary it says that “… the bank's duty of care runs to its customer, M, not to Mr M in his personal capacity. Whether Mr M owes the company money is a matter between them; it does not affect the bank's independent duty to the company as its account holder. The question of what internal remedies the company might have against its director is entirely separate from the question of whether the bank breached its duty to the company.” As an agreement could not be reached, the complaint has been passed to me for a final decision. 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. Although Mr M is the director and owner of M, it is a limited company and a separate legal entity to Mr M. And M as the customer of Lloyds and the owner of the bank account from which the disputed payments were made, is the complainant in this case. Taking into consideration the relevant regulatory rules and guidance, codes of practice and good industry practice, I expect Lloyds to take steps to help protect its customers from financial harm resulting from fraud or a scam. However, even if I were to find it failed to do so, I cannot fairly or reasonably require that it reimburse M unless it suffered a loss as a

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result of a scam. So the first matter I must decide is whether it was M or Mr M that suffered the loss. Neither party disputes that the payments although from M’s account were in fact for an investment Mr M was making in his personal capacity and for his own gain. And there is no evidence that any of the payments were made for M’s benefit. As such, I find the payments had the effect of withdrawing an asset from M but for Mr M’s personal use. Mr M would have removed the funds from the business either as a director’s loan or dividend. It follows that the losses incurred as a result of being scammed were in his personal capacity. M (the complainant in this case) would not have lost any money itself. I appreciate Mr M’s point and agree that Lloyds has a duty to protect M from financial harm due to fraud or a scam. However, even if I were to find that Lloyds ought to have intervened in the payment instructions before processing them, I could not uphold the complaint as there is no evidence that M suffered a financial loss due to a scam it was a victim of in its own capacity. I understand that Mr M was the victim of a cruel and sophisticated scam, and I accept that the loss to him is significant so I know he will be disappointed by this outcome. But as I do not find that M suffered a loss to the scam, I cannot fairly or reasonably direct Lloyds to pay M for Mr M’s personal loss. My final decision For the reasons set out above, my final decision is that I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask M to accept or reject my decision before 27 April 2026. Oluwatobi Balogun Ombudsman

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