The Financial Ombudsman Service (FOS) has overturned its previous ruling against a couple who lost over £100,000 to the collapsed high-street jeweller Vashi, enabling their bank, NatWest, to reimburse the funds. The decision, issued by ombudsman Stephen Dickie, held that NatWest should have taken greater steps to prevent the transfers, which were made despite warnings under the authorised push payment (APP) scam code.

Vashi, founded in 2007 by Vashi Domínguez and operating stores in London, Manchester, and Birmingham, entered liquidation in 2023 with debts totaling approximately £170 million. The firm is currently under investigation by the Metropolitan Police’s complex fraud team amid allegations it operated as a “deliberate fraud” by overstating its financial position and diamond inventory.

In this specific case, Mr and Mrs C, who requested to remain anonymous, transferred £103,200 to Vashi in 2021 from their NatWest account. The couple’s funds were lost following the collapse of the jeweller. The FOS initially found no bank liability, but overturned this judgment after considering that NatWest should have been alert to unusual transactions, including two payments totaling £50,000 sent within 24 hours. Dickie stated that neither the couple nor NatWest was aware that Vashi was a façade, but added that the bank had obligations under the APP scam guidelines to identify and act on suspicious activity.

Mr C described the refund decision as a relief after what he called a difficult experience. While acknowledging the inherent risks of investing, he distinguished between investments that perform poorly and those involving fraud. According to the ombudsman, had the couple been aware of Vashi’s financial reality, they likely would not have proceeded with their investment despite the company’s promises of high growth.

NatWest has agreed to repay the full amount to Mr and Mrs C. This ruling has implications for other investors, as the FOS currently has a backlog of more than 30 related cases involving banks such as HSBC, Lloyds, and Nationwide. These cases collectively seek to recover over £16 million in losses for Vashi investors. The FOS compensation cap for individual claims stands at £455,000, and while some investors may seek larger remedies through other channels, the ombudsman’s decisions represent a significant route to recoup losses.

Stuart McFadden, co-founder of Refundee, which assisted the couple and other affected investors in pursuing claims, described the ruling as a “huge victory” against what he characterized as a sophisticated and convincing scam. Vashi Domínguez, the jeweller’s founder, has reportedly left the UK, and authorities have been unable to make contact since 2023. Efforts to reach Domínguez for comment have so far been unsuccessful.