Law 360 quotes Caroline Greenwell and Bella Henry on the Santander APP fraud case
The High Court has clarified the limits of banks’ duties toward fraud victims, rejecting a claim that Santander UK PLC should have prevented £415,000 from being transferred to scammers.
In its March ruling, the court found that Santander was not obliged to recover funds lost by CCP Graduate School after it fell victim to an authorised push payment (APP) fraud—a scam where individuals are tricked into sending money to fraudsters posing as legitimate payees.
Santander had received the funds into an account controlled by the fraudsters but had no contractual relationship with CCP.
This was the first case of its kind since the UK Supreme Court’s landmark July 2023 decision, which confirmed that banks do not owe customers a legal duty to stop payments in APP fraud cases.
Caroline Greenwell, Partner, comments for Law 360 and said that the judgment appeared to be:
Another door closed in the face of the customer. It was a very bank-friendly judgment and a very consumer-unfriendly judgment, because it kind of left the customer with no recourse.
Bella Henry, Associate, adds that, if the court had found the other way, it would put lenders in an "impossible situation" where they had to comply with competing duties to their clients and other sides involved in transactions.
It's quite a practical view from the courts. They're essentially saying banks couldn't possibly take on this duty for every consumer. It's consumer unfriendly. But then equally, arguably the only practical result.
Read the full piece in Law 360 here.
