Not upheld: authorised push payment (APP) scam - reimbursement claim complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr H and Ms D complained that HSBC should refund £2,800 paid to a builder (S) via N's account for fence replacement work that was never completed. Mr H believed he was the victim of an APP scam after S failed to return to complete the work or refund the money. HSBC refused reimbursement, arguing the situation was a civil dispute. The ombudsman found that while the circumstances had common features of a rogue trader scam, there was insufficient evidence to establish that S intended to scam Mr H at the time the payment was made. The payment was made to the intended recipient as requested, and evidence suggested N had legitimate building trade involvement. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the definition of an APP scam under the Reimbursement Rules, which requires that either the recipient is not who the consumer intended to pay, or the payment is not for the intended purpose. While there were common hallmarks of a rogue trader scam, the ombudsman found on the balance of probabilities that S was likely the builder Mr H originally spoke to and was involved in the building trade. Critically, the payment was made to N's account, which was the intended recipient as requested by S. The ombudsman could not definitively establish that S intended to scam Mr H at the time the payment was made, as alternative explanations existed (such as disagreement over additional work, financial difficulty, or taking on too many jobs). The evidence from N's bank statements suggested legitimate building trade activity with no other reported fraudulent payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website