Not upheld: scam reimbursement under CRM Code complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr and Mrs T lost £100,000 after loaning funds to company G in 2022, which they believed was a legitimate short-term loan arrangement. They received some interest payments initially but lost the capital when G failed to return funds or provide further payments. They complained to HSBC in January 2025, claiming they were victims of a scam and seeking reimbursement under the CRM Code. The ombudsman rejected the complaint, finding insufficient evidence that G operated a scam or that the payments met the CRM Code definition of an APP scam, and noted that HSBC had provided appropriate warnings when the unusual payments were made.

The Ombudsman's reasoning

The ombudsman applied the CRM Code definition of an APP scam, which requires either deception into transferring funds to a different person, or transfer for fraudulent purposes. Mr and Mrs T intended to loan funds to G for legitimate purposes (as they believed). No evidence was provided demonstrating G took the funds with a different purpose in mind or with fraudulent intent. G remained registered at Companies House and the FCA warning only stated G was unauthorised, not that it operated a scam. The fact that some funds were returned and that Action Fraud was notified does not constitute evidence of an APP scam. HSBC's warnings were appropriate and intervention would not have made a difference given no evidence of scam at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website