Not upheld: scam and fraud - authorised push payment (APP scam claim) complaint against Starling Bank Limited

Decision detail

Summary

Mrs G paid company C a total of £45,500 (initial instalment of £19,500 and second instalment of £26,000) for the supply and conversion of an electric van into a campervan. 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 Starling Bank Limited refund her losses. Starling declined, characterising the matter as a civil dispute rather than a scam. The ombudsman upheld Starling's decision, finding that while Mrs G did not receive the campervan she paid for, the available evidence does not establish that company C fraudulently intended a different purpose for the payments, which is required to meet the CRM Code definition of a scam. Although C engaged in poor business practices and administrative errors, these do not constitute fraud.

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. While Mrs G intended to purchase a campervan and believed the transaction was legitimate, the ombudsman found insufficient evidence that company C did not intend to act in accordance with the agreed purpose. The evidence showed C was an established company with business transactions consistent with vehicle importing and conversion, had vehicles on site in various stages of completion, and while some administrative errors or poor practices may have occurred (such as providing vehicle details prematurely to trigger payments), this does not establish fraudulent intent. The fact that only two customers received the same vehicle identification number suggests an administration error rather than a widespread scam. The ombudsman concluded that failure to supply goods, while unfortunate, does not necessarily indicate a scam and does not establish that C never intended to fulfil orders.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website