Not upheld: authorised push payment (APP) scam / fraud - reimbursement claim under CRM Code complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mrs P paid a construction firm £13,938.13 across three instalments for a kitchen installation, with £1,881.88 transferred from her Halifax current account on 26 July 2024. The firm completed work to a very poor standard and ceased operations after the final payment, leaving Mrs P with significant losses. Mrs P complained to Halifax claiming she had been scammed, but Halifax declined reimbursement under the CRM Code, characterising it as a civil dispute. The ombudsman upheld Halifax's decision, finding insufficient evidence that the construction firm intended fraud from the outset, as it had completed substantial work, maintained legitimate business registration, positive reviews, and no prior fraud reports.

The Ombudsman's reasoning

The ombudsman concluded that while Mrs P suffered a genuine loss and was treated badly by O, the evidence did not support that O was operating a scam as defined under the CRM Code. The key distinction was that O completed substantial work (albeit poorly), had legitimate business registration, positive reviews, prior trading history, and no evidence of fraudulent intent from the outset. The loss was characterised as a civil dispute regarding defective services rather than fraud, which is expressly excluded from CRM Code protection. The ombudsman found insufficient evidence that O received the funds with no intention of carrying out any work.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website