Not upheld: Authorised Push Payment (APP) scam claim / Fraud allegation complaint against HSBC UK Bank Plc

Decision detail

Summary

Ms K paid £800 to a tradesman 'P' found through an online directory for bathroom work, but P failed to complete the work or provide materials. Ms K claimed this was an Authorised Push Payment (APP) scam and requested HSBC refund her money. HSBC declined, characterising the matter as a private civil dispute. The FOS Investigator agreed with HSBC, and Ms K appealed. The ombudsman upheld HSBC's decision, finding that although P's conduct was poor and a CCJ was issued against P, the evidence did not establish fraud on the balance of probabilities. Key factors included that P was a registered company, provided quotes and invoices, continued communicating with Ms K, and the beneficiary bank found no concerns with account operation. The ombudsman concluded this was a civil dispute over non-performance rather than a premeditated scam.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of an APP scam, which requires proof of criminal deception where the recipient is not who the consumer intended to pay or the payment is not for the intended purpose. The ombudsman found that Ms K paid the intended recipient (P) for the stated purpose (building work). While P failed to deliver the service, this alone does not establish fraud. The ombudsman applied the civil standard of proof (balance of probabilities) and found that fraud was not the most probable explanation. Key factors supporting this conclusion included: P was a registered company with an established history; P provided quotes and invoices; P continued communicating with Ms K after payment; the beneficiary bank found no concerns with account operation; and no substantive criminal investigation was being pursued by authorities. The ombudsman concluded this was a civil dispute over non-performance of services rather than a premeditated scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website