british bank barclays won an appeal to the UK Supreme Court on the level of obligations of banks to protect their customers against fraudsters, this according to experts, could stop the avalanche of litigation.

The legal battle started in 2020 when fiona philipmusic teacher and client for many years, sued the bank after being tricked into transferring £700,000 (906 thousand dollars) to the account in United Arab Emirates (UAE) in the tricky scam of the so-called official pre-payment auto (“press” or APP).

This type of fraud has become the largest type of payment fraud in the UK, costing customers £583 million ($752 million) in 2021, a 39 percent increase over 2020, according to watchdog Payment System Regulator (PSR). Authorities are trying to make banks important in preventing fraud.

Phillip claim that barclays he was obligated to ignore his instructions if the bank had reasonable grounds to suspect that he was being duped.

However, in a unanimous ruling that lawyers say will bring peace 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 2021 Court of Appeal decision allowing the case to proceed to court.

“In the event that the customer has authorized and instructed the bank to make payments, the bank must immediately carry out the instruction,” he said. “Banks don’t have to worry about the success or risk of their clients’ payout decisions.”

The court agreed that this type of deception is a great hardship for the victims. He also said that ultimately it was up to the DPR to consider who should be held accountable, he recalled The new law on Financial Markets and Services provides for mandatory payment plans in some fraud cases nationwide; YesHowever, the proposed plan does not apply to overseas payments.

Barclays welcomed the judge’s decision which will provide “certainty and clarity” on important legal issues.

james levylaw firm partners ashHe said that under these circumstances it is up to the customer to check whether the payment instructions are correct.

“This offsets the significant risk of litigation against state banks brought on by clients who have fallen victim to PPP fraud,” he said.

Given the outcome of the claim, the Supreme Court allows him to Philippines introduce the new lawsuit against Barclays alleges that the bank breached its obligations by failing to take appropriate steps to recover the money transferred to UAE.

PNMO