Customer bought a phone from an online auction site

Banking Electronic Payments

Paul agreed to buy an iPhone 8 for £300 through an online auction site. When it came to payment the seller asked that Paul make a bank transfer rather than using the auction site’s recommended payment channel, as they said it was quicker and there wouldn’t be any fees to pay.

What happened?

The seller said they would send the phone in the post on receipt of the payment. Paul set up the online payment and transferred £300 to the seller.

The bank provided a warning about auction site scams on its online banking site. Paul says he read the warning but thought it didn’t apply to him as he had bought things from the auction site many times before, using this payment method and hadn’t had any problems in the past. And he felt reassured as the seller had an excellent rating – so he thought everything would be fine.

A week later when the phone hadn’t arrived he contacted the seller but received no response. After several attempts at contacting the seller without any success Paul contacted his bank to say he’d been the victim of a scam. His bank contacted the receiving bank to see if they could put a stop on the funds leaving the account. But by this time, the scammer had already moved the money out of the account.

What we said

We looked at Paul’s account history and at the types of payments he usually made. Having done so we felt that this transaction was not out of character or unusual for Paul, in fact we could see he made payments of this nature on a regular basis for similar and often higher amounts. The transaction wasn’t picked up by Paul’s bank. But we didn’t think that was unreasonable bearing in mind the value and nature of the payment and that it wasn’t out of character in comparison to his normal account activity.

The bank had also provided a warning which Paul said he had read but decided to proceed anyway. So overall we didn’t think the bank acted unreasonably – and we could see that Paul’s bank couldn’t have recovered the money from the receiving bank as the funds had already been moved on. So we didn’t think it would be fair in the circumstances to tell the bank to refund Paul.