Not upheld: Fraud reimbursement (APP scams) complaint against Cater Allen Limited

Decision detail

Summary

K, a limited company, complained that Cater Allen failed to refund £20,918.67 in payments made between May and June 2023 towards an investment opportunity that K believed was a scam. K's directors had made the payments using K's Cater Allen account to invest with company I. Cater Allen refused to refund the payments, stating they were correctly authorised. The ombudsman determined that the evidence indicated the payments were personal investments by K's directors rather than business investments by K, as all correspondence was in the directors' personal names, no account was opened in K's name, and the investment was not recorded in K's filed accounts. Consequently, the ombudsman found that K's directors, not Cater Allen, are responsible for repaying the funds to K, and the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that the evidence demonstrates the disputed payments were personal investments by K's directors rather than business investments by K. All correspondence was in the directors' personal names, no evidence supported that an account in K's name was attempted or refused, the investment type differed from K's business, and the investment was not recorded in K's filed accounts. The subsequent assignment to the directors' loan account occurred only after the fraud was discovered, suggesting the directors used company funds for personal investments rather than investing on behalf of K. Therefore, K's directors are responsible for repaying K, not Cater Allen.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website