Not upheld: Authorised Push Payment (APP) Scam / Fraud - Refund Claim complaint against Santander UK Plc

Decision detail

Summary

Mrs G paid company C a total of £45,500 (initial £19,500 and second £26,000 instalments) for a £65,000 electric van to campervan conversion. When C failed to deliver the campervan and subsequently went into liquidation in December 2024, Mrs G claimed she had been the victim of a scam and requested Santander reimburse her losses under the CRM Code. Santander declined, characterising it as a civil dispute. The ombudsman upheld Santander's decision, finding that while C engaged in poor business practices such as providing misleading vehicle information and trading while insolvent, the evidence did not establish that C never intended to fulfil customer orders, which is necessary to meet the legal definition of a scam under the CRM Code.

The Ombudsman's reasoning

The ombudsman applied the CRM Code definition of a scam, which requires that a customer transfers funds for what they believe to be legitimate purposes, but which are in fact fraudulent. The key question was whether C intended to act in accordance with the agreed purpose of the payments. While Mrs G did not receive the campervan, the ombudsman found that failure to supply goods does not necessarily indicate a scam. The evidence showed C was an established company with legitimate business activity, had vehicles in various stages of completion on site, and the issue of duplicate vehicle identification numbers only affected two customers and could have been an administration error. The ombudsman concluded that C may have been in financial distress and provided vehicle details prematurely to trigger payments, but this poor business practice does not establish intent to defraud. The ombudsman noted that ongoing investigations by the Insolvency Service and police could not be relied upon as they were still ongoing.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website