Not upheld: fraud reimbursement claim - APP scam vs private civil dispute complaint against The Co-operative Bank PLC

Decision detail

Summary

Mr P paid £500 for a vehicle rental that was not provided and claimed fraud reimbursement from Co-op. Co-op rejected the claim as a private civil dispute. The ombudsman upheld Co-op's decision, finding that under the Reimbursement Rules (which apply to APP scams), Mr P's circumstances more likely constitute a civil dispute rather than fraud. Key factors included Mr P's prior rental history with the third party, introduction by a trusted friend, lack of written evidence, inconsistencies in testimony, and the third party's subsequent refund attempt and credit to Mr P's account, all suggesting a service failure rather than intentional deception.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules which require firms to reimburse authorised push payments where the payer is a victim of fraud, but exclude private civil disputes. An APP scam requires criminal deception, and the evidence must be convincing. The ombudsman found that Mr P's circumstances more likely constitute a civil dispute because: (1) no evidence of the rental agreement was provided; (2) inconsistencies in Mr P's testimony cast doubt on reliability; (3) Mr P's prior relationship with the third party and trusted introduction lowered fraud probability; (4) the third party's later refund attempt and eventual credit to Mr P's account suggested legitimate service issues rather than intentional fraud; and (5) Mr P's fraud report may have prevented the refund from being issued.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website