Not upheld: Alleged Authorised Push Payment (APP) scam / irresponsible payment processing complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs W paid a builder (T) £5,300 via three payments from her Lloyds account for building work between June and July 2025. The builder failed to complete the work, delivered poor quality work, and did not provide paid-for materials, leading Mrs W to believe she had been scammed. Lloyds declined to refund the payments, classifying the matter as a civil dispute rather than an Authorised Push Payment (APP) scam. The ombudsman upheld Lloyds' decision, finding that while T's conduct was unprofessional, the evidence did not convincingly demonstrate that T intended to defraud Mrs W from the outset. The ombudsman concluded the matter was a civil dispute between Mrs W and T, not a criminal fraud covered by the Reimbursement Rules.

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. Since Mrs W paid the person she intended (T) and the payment was for the stated purpose of building work, the first element was not satisfied. For the second element, the ombudsman required convincing evidence that T intended to defraud Mrs W from the outset. The ombudsman found that while T's conduct was unprofessional and poor quality work was delivered, this does not necessarily demonstrate intent to defraud. The evidence from the beneficiary bank showing transactions consistent with building trade activity, the absence of other complaints about the account, and the lack of substantive investigation by authorities all suggested fraud was not the most probable explanation. The ombudsman concluded that poor performance, unprofessionalism, or financial difficulties could equally explain T's failure to complete the work, and that the matter was more likely a civil dispute.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website