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

Decision detail

Summary

Mr K purchased clothing via social media and sent two payments totalling £650 to a seller. He received items of significantly less value than expected. The seller claimed a mistake and promised a refund, but Mr K was subsequently blocked and did not receive his money back. Mr K complained to HSBC seeking a refund as a scam victim, but HSBC declined, classifying it as a civil dispute. The ombudsman upheld HSBC's decision, finding that while Mr K may have been treated unfairly, the evidence did not meet the high threshold required to prove the seller committed fraud under the Reimbursement Rules, and the matter was more appropriately classified as a private civil dispute.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of an APP scam, which requires either that the recipient is not who the consumer intended to pay, or the payment is not for the purpose intended. The ombudsman found that Mr K paid who he intended and the payment was for the stated purpose (purchasing clothing). While Mr K did not receive what he paid for, the seller sent items and acknowledged making a mistake. The ombudsman found that fraud requires a high threshold of proof (balance of probabilities, more likely than not) and that the evidence did not convincingly demonstrate the seller intended to defraud Mr K. The seller's continued communication, the sending of some items, the lack of other complaints about the account, and the possibility of legitimate mistake, incompetence, or unprofessionalism all weighed against a finding of fraud. The ombudsman concluded this was a private civil dispute covered by consumer rights law rather than an APP scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website