Not upheld: Fraud reimbursement (APP scams) complaint against Handelsbanken plc

Decision detail

Summary

Mrs and Mr M complained to Handelsbanken seeking refunds for three payments totalling £65,000 made to a tradesman (J) for building work on their property, claiming they had been victims of a scam. Handelsbanken declined, characterizing the situation as a civil dispute. The ombudsman upheld Handelsbanken's decision, finding that although the roof work was substandard and condemned, funds were unaccounted for, and a loan was not repaid, these circumstances do not meet the legal definition of an APP scam because J completed work and used funds for the agreed purposes. The ombudsman concluded that disputes about poor quality work, unaccounted funds, and loan non-repayment are civil matters, not scams requiring dishonest deception from the outset, and therefore Handelsbanken was not responsible for the losses.

The Ombudsman's reasoning

The ombudsman applied the FCA Handbook definition of an APP scam, which requires either deception into transferring funds to the wrong person or transfer for purposes believed legitimate but actually fraudulent. For each payment, the ombudsman found that J did complete work or use funds for the agreed purposes, albeit poorly or without full accounting. The ombudsman concluded that poor quality work, lack of repayment of a loan, and unaccounted funds constitute civil disputes about the quality of services or breach of contract, not scams requiring dishonest deception from the outset. The ombudsman noted that the APP Scam Reimbursement rules do not apply retrospectively to payments made before 7 October 2024.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website