Not upheld: APP scam refund claim / classification of transaction as civil dispute complaint against Santander UK Plc

Decision detail

Summary

Mr S paid £7,800 to lettings agency P for rent over seven months but was later evicted when the property was repossessed due to the landlords' mortgage default. Mr S claimed this was an APP scam and sought reimbursement from Santander under the CRM Code and reimbursement rules. Santander declined, classifying it as a private civil dispute. The ombudsman upheld Santander's decision, finding that Mr S paid the intended recipient for the intended purpose and received the service (accommodation), and that there was insufficient evidence of fraudulent intent by the lettings agency or property owners. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the definitions of APP scam versus private civil dispute under both the CRM Code and the FPS/CHAPS reimbursement rules. An APP scam requires criminal deception where either the recipient is not who the consumer intended to pay, or the payment is not for the purpose intended. Here, Mr S paid the intended recipient (P) for the intended purpose (securing a tenancy), and he did receive that service by living in the property. The ombudsman found insufficient evidence of fraudulent intent by P or the property owners, noting that Mr S provided no clear evidence the property was due for repossession when payments began, no substantiated evidence of criminal proceedings against Mr C, and no evidence that P was aware of mortgage issues. The fact that the property was later repossessed does not constitute proof of fraud. Therefore, this constituted a civil dispute regarding the property's ownership and mortgage status, which falls outside APP scam protections.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website