Not upheld: fraud reimbursement claim under Reimbursement Rules complaint against PayrNet Limited

Decision detail

Summary

Mrs C, a sole trader, paid Business S for marketing and automation services in February 2025 but the company failed to deliver and refused a refund. Mrs C claimed the payments were fraudulent and sought reimbursement from her payment service provider, PayrNet Limited. PayrNet rejected the claim as a private civil dispute rather than fraud. The ombudsman upheld PayrNet's decision, finding that while Business S provided poor service and unprofessional conduct, the evidence showed it was a legitimate business operating in good faith, and the circumstances did not meet the definition of an authorised push payment scam under the Reimbursement Rules, which require evidence of deliberate deception or dishonesty.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules framework, which requires that for reimbursement to be due, a payment must have been made as part of an APP scam involving fraudulent or dishonest manipulation to transfer funds to an unintended recipient or for an unintended purpose. The ombudsman found that Business S was a legitimate business operating in good faith, despite poor service delivery and unprofessionalism. While Mrs C alleged misrepresentation regarding software ownership, pressure for further payments, and lack of expertise, the ombudsman determined these do not constitute fraud, which requires convincing evidence of deliberate deception with intent to cause loss. The circumstances aligned more closely with a private civil dispute—a contractual disagreement between consumer and payee—rather than criminal fraud or dishonesty.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website