Barclays wins appeal over bank transfer fraud ruling

Barclays has won its appeal against a ruling that it is liable to refund its customers who are victims of bank transfer fraud.

The Supreme Court said it was not the bank’s responsibility to ‘concern itself with the wisdom or risks of its customer’s payment decisions’, following legal action from a disgruntled fraud victim.

Music teacher Fiona Philipp sued Barclays in 2020 saying it should have stopped her from sending vast amounts to bogus accounts in the UAE – in what is known as an authorised push payment fraud.

She lost £700,000 and accused Barclays of failing in its duty of care. 

Yesterday, Supreme Court judge George Leggatt said the bank was authorised to make the payment and to not do so would be inconsistent with banking law. As a result he overturned a 2021 Court of Appeal ruling.

He permitted Philipp to pursue a case that the bank breached its duty by failing to take sufficient steps to recover her cash.

Scams such as this one cost consumers more than £500million in 2021, according to the payments watchdog, amid concern that they are on the rise. 

The Payment Systems Regulator has set out plans to introduce compulsory refunds for victims of push payment fraud. Details are being consulted on.