Upheld: authorised push payment (APP) scam - failure to reimburse complaint against Barclays Bank UK Plc

Decision detail

Summary

Mrs M hired a private builder recommended by an established construction company to build a home extension and made four bank transfers totalling £7,620 between June and October 2024. The builder carried out minimal work and then ceased communication. Mrs M reported the matter to police, who arrested and interviewed the builder in connection with fraud-related offences. Barclays initially refused reimbursement, characterising it as a private civil dispute. The ombudsman upheld the complaint, finding the payments constituted an authorised push payment scam under the CRM Code, as the police investigation supported a finding of fraud on the balance of probabilities. Barclays was ordered to reimburse the full amount plus interest.

The Ombudsman's reasoning

The ombudsman applied the civil standard of proof (balance of probabilities) rather than the criminal standard (beyond reasonable doubt). Although Mr S had not been convicted, the seriousness with which police treated the complaints and progressed to arrest and interview suggested the threshold for fraud had been met. The ombudsman concluded it was unfair to require Mrs M to wait for the outcome of criminal proceedings, which could take many years. The payments fell within the CRM Code definition of an APP scam. Neither of the CRM Code exceptions applied: Barclays provided no effective warning, and Mrs M had a reasonable basis for believing Mr S was legitimate given the recommendation from an established business and absence of negative online information.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website