Bank had no grounds to suspect overseas payments were part of a scam

Categories:

Fraud & scams, Investment,

Summary:

In January 2022, Bryson learned about what he believed was a legitimate foreign exchange investment opportunity. During the next seven months, Bryson made four international payments totalling $18,250 to different Hong Kong bank accounts. One payment was returned and was later sent to another account in Bryson’s name. In early 2026, after becoming aware of overseas regulatory warnings about such so-called investments, Bryson concluded he had been scammed. In May 2026 he contacted the bank. He asked the bank to reimburse his loss, but the bank declined.

Published:

October 2026

Bryson complained to us that the bank failed to identify warning signs of a scam. He said the payments were unusual relative to his day-to-day banking activity and involved the transfer of money to four overseas accounts. Bryson said the bank should have intervened, warned him or carried out checks before processing the payments.

Our investigation

Bryson made the payments through the bank's mobile banking app and they were authorised using security codes sent to Bryson’s mobile phone. The bank's fraud detection system did not identify the transactions as suspicious. Payments to overseas accounts are not uncommon, and making payments to different Hong Kong-based accounts did not, on its own, amount to grounds for the bank to treat the transactions as suspicious. We did not consider the payments, whether viewed individually or collectively, as warning signs of a scam that the bank should have identified.

Between the first and second payments, Bryson spoke to the bank about restructuring his credit card debt into a personal loan, but a recording of that call showed there was no discussion about the overseas payment and nothing that suggested Bryson was being scammed.

A second interaction with the bank took place after Bryson called to say the intended recipient of an international payment had not received the money. The bank replied that such transfers could take several business days to process and confirmed it had sent the payment. Inquiries of this type – about the progress of an international payment – are not unusual, and we found there were no warning signs of a scam during the call.

A third interaction took place after Bryson’s fourth payment was returned. The bank told him the payment had been returned for an administrative reason and suggested contacting the recipient for more information. It is not uncommon for international payments to be returned and the reason in question would not ordinarily suggest a scam. Again, we found nothing about the interaction that should have alerted the bank to a possible scam.

The regulatory warnings Bryson relied on did not assist his complaint. The payments were not made to the investment operation named in those warnings and did not refer to it. There was no evidence that the bank knew, or should have known, the payments were connected to that operation. We therefore did not consider the warnings meant the bank should have treated the payments as indicators of a scam.