FOS warns on scam complaints – are banks doing enough?

The Financial Ombudsman Service has noted a “dramatic rise” in complaints by consumers concerning financial scams and fraud. With the hope of embuing safer financial habits and a reduction in these types of complaints, FOS reminds consumers to be careful, but also expects banks to respond fairly and effectively to customers’ complaints. Continue Reading

LCF mini-bond holders withdraw appeal against FSCS

The Financial Services Compensation Scheme (FSCS) confirmed on 23 August that London Capital and Finance (LCF) mini-bond holders have withdrawn their appeal against an important March 2021 High Court decision dismissing their judicial review claim.  FSCS confirmed that the litigation had been concluded without any change to any of its earlier decisions on LCF claims.

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FCA Business Plan 2021/22 – transformation, accountability, and regulatory priorities for the coming year

The FCA’s annual business plan is a closely watched indicator of what we can expect from the regulator in the coming year. The recently published Business Plan for 2021/22 indicates the FCA’s focus on continued transformation and greater accountability as a regulator. It also sets out key priorities for the FCA for  the coming years across a mix of familiar focus areas and more nascent emerging themes.

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Compulsory ADR – Coming soon to a dispute near you?

Alternative dispute resolution (or “ADR”) has long played an important role in dispute resolution. A recent report by the Civil Justice Council (the “Report”), commissioned to consider the legality and desirability of making ADR compulsory, could see ADR playing an even more prominent role in future. Continue Reading

Bank did not breach duties in loan renegotiation

In December 2006, Mr Morley, a commercial property developer, entered into a £75m, three-year loan with Royal Bank of Scotland plc to refinance his property portfolio, add new properties to it and provide him with a “bonus payment” for his personal use. The bank secured the loan over his portfolio of 21 commercial properties in the North of England valued at around £98m.

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Supreme Court establishes new scope of duty test in professional negligence

The UK Supreme Court has significantly reformulated the scope of duty test that applies in cases of professional negligence. It handed down its decision in the case of Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20 on 18 June 2021. SPB acted for the successful party, Manchester Building Society.

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FCA issues updated statement on insurers making deductions for Government support from COVID-19 business interruption settlements

FCA

Last month, the Financial Conduct Authority (“FCA”) published updated guidance regarding COVID-19 business interruption settlements and deductions made for Government support.

The FCA first commented on this issue in August 2020, following reports that some insurers were making deductions for Government support received by policyholders, when calculating payments for business interruption insurance claims.

The FCA’s recent statement follows its January “Dear CEO letter”, which we discussed in our previous blog post here. In this letter, the FCA re-iterated its expectations that insurers should only deduct Government support from claim payments if the appropriateness of such a deduction has been thoroughly considered and the insurers’ conclusions properly documented.

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Authorised Push Payment Fraud – court rules on scope of banks’ obligations

In March 2018, Mrs Philipp transferred two payments to accounts in the UAE, totalling £700,000, representing her and her husband, Dr Philipp’s savings. In doing so, Mrs and Dr Philipp thought they were assisting an investigation by the FCA and National Crime Agency (“NCA”) into fraudulent activities. Unfortunately for the Philipp family, they were, in fact, the victims of that fraud, not helping to tackle it.

Dr Philipps authorised transfers to Mrs Philipps’ accounts from his own, and Mrs Philipps authorised the transfers to the two UAE-based bank accounts. They knew the destination of the funds, and meant for them to be sent. What they did not know was that the two accounts were controlled by fraudsters, who had tricked them into making the payments to “safe” accounts, as part of investigations into an alleged fraud.

This type of scam is known as authorised push payment (“APP”) fraud. The customer instructs their bank or other payment services provider to transfer money from their account and the transaction is carried out with their consent. As such it is authorised by the customer (even if the authorisation resulted from a fraud). APP fraud is a growing problem in the UK.

Whilst Mrs Philipp’s bank tried to get the funds back from the receiving bank on being made aware of the APP fraud, it was unable to do so. Mrs Philipp sued the Bank, on the basis that it was under a duty to do more to prevent Mrs Philipp failing victim to the scam. This blog analyses the judgment on a summary judgment application made by the Bank, which sought to have Mrs Philipp’s claim struck out.

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