Not upheld: Fraud reimbursement (APP scams) complaint against Allied Irish Banks Plc

Decision detail

Summary

Miss M paid a contractor £7,500 for a house extension but received minimal work and discovered she had been scammed. She reported the matter to AIB, which refused reimbursement, classifying it as a buyer/seller dispute. The ombudsman found that AIB should have intervened when Miss M requested the £6,500 payment as it was unusually large and out of character, but concluded this failure did not cause her loss. Miss M had already verified the contractor's legitimacy through Companies House and personal referrals, and would likely have proceeded with payment regardless of bank intervention. The ombudsman also noted that recovery would have been impossible as the funds had been moved within a month.

The Ombudsman's reasoning

While AIB should have intervened when Miss M requested the £6,500 payment as it was unusually large and out of character, the ombudsman concluded this failure did not cause her loss. Miss M had already conducted reasonable due diligence checks (verified Companies House registration, knew satisfied customers locally) and would likely have proceeded with payment regardless of bank intervention. The ombudsman also noted that Confirmation of Payee was not available until 2023, so AIB could not have identified the personal account issue at the time. Recovery efforts would have been futile as funds had already been moved within a month.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website