Not upheld: scam reimbursement claim / Authorised Push Payment (APP) scam complaint against HSBC UK Bank Plc trading as first direct bank

Decision detail

Summary

X and X paid Company A for building work on their property between February and April 2025. After terminating the agreement due to concerns about progress and quality, they discovered significant issues with the work when a second contractor was engaged. X and X requested reimbursement from First Direct, claiming they were victims of a scam. First Direct declined, characterising it as a civil dispute. The ombudsman upheld First Direct's decision, finding that the payments did not meet the Faster Payments Scheme definition of an APP scam because both parties intended the payments for building work completion. The issues raised—misrepresentations about drawings, unsuitable materials, and poor workmanship—relate to service quality rather than fraud or dishonesty, making this a civil matter between the parties rather than a scam.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme 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 evidence showed that both X and X and Company A had the same purpose in mind: completion of building works on the property. While Company A may have misrepresented the quality of drawings and calculations, and provided substandard work and materials, these issues relate to the quality of services provided rather than Company A's intention to complete the works. The ombudsman concluded this was a civil dispute regarding service quality, not fraud or dishonesty, and therefore did not meet the APP scam definition. First Direct could not have identified fraud risk at the time of payment and had no obligation to prevent the payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website