Barclays wins appeal over payment fraud at Grupo Milenio, UK

British bank Barclays She won an appeal to the UK Supreme Court over the extent to which banks have a duty to protect their customers Against scammers, according to experts, this could stop an avalanche of lawsuits.

The legal battle started in 2020 when Fiona Phillipa music teacher and client for many years, He sued the bank after being tricked into transferring £700,000 (906 thousand dollars) to accounts in United Arab Emirates (UAE) Its an elaborate scam of so-called pre-authorized automatic payments (“Push” or APP).

These types of scams have become the largest type of payment fraud in the UK, costing customers £583m ($ 752 million) in 2021, an increase of 39 percent compared to 2020, according to the watchdog Payment Systems Regulator (PSR). Authorities are trying to make banks key in preventing fraud.

Philip claimed it Barclays She was obliged to ignore his instructions if the bank had reasonable grounds to suspect her of being defrauded.

But in a unanimous ruling, according to the lawyers, that would bring calm to the financial sector, Supreme Court Justice George Leggatt stated that this would be “inconsistent with the first principles of banking law”, By overturning the Court of Appeal’s 2021 ruling allowing the case to proceed to trial.

“When the customer authorizes the bank and pays his instructions, the bank must immediately implement the instructions,” she said. “A bank does not have to worry about the success or risk of its customers’ payment decisions.”

The court agrees that this type of fraud presents great hardships for the victims. He also said that in the end, it is up to Parliament to consider who should take responsibility, indicating that The new Financial Services and Markets Act provides for a mandatory payment plan in some cases of national fraud; YesHowever, the proposed plan does not apply to payments abroad.

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Barclays welcomed the judge’s decision, which will bring “certainty and clarity” on an important legal issue.

James Levypartner in the law firm AshurstHe said that in this kind of situation It is up to the customers to validate the payment instructions.

“This closes the great risk of what could have been a series of lawsuits against the country’s banks brought by clients who were victims of PPP fraud,” he said.

In light of the outcome of the claim, the supreme court He allowed it Philip He presents A new lawsuit against Barclays alleging that the bank breached its duty By not taking appropriate steps to recover the funds transferred to The United Arab Emirates.


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