Not upheld: scam reimbursement / APP fraud claim complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr K purchased a car for £1,600 via an online marketplace, inspected it in person, and transferred payment to the seller on 14 January 2026. Within hours, serious faults became apparent and the seller became uncontactable. Mr K complained to HSBC claiming he was the victim of a scam and sought reimbursement. HSBC declined, stating it was a civil dispute. The ombudsman upheld HSBC's decision, finding that although the car was defective, the transaction does not meet the Reimbursement Rules definition of an APP scam because Mr K received the car he intended to purchase and the payment purpose matched between both parties. The dispute concerns product quality, which is a private civil matter outside the scope of APP scam protections.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of an APP scam, which requires fraudulent or dishonest conduct to deceive a consumer about the purpose of the payment. Mr K's purpose was to purchase a car and the seller's purpose was to sell it; these purposes matched. Mr K received the car he intended to buy and obtained ownership documentation. The issues stem from the quality and condition of the car, which constitutes a private civil dispute over defective goods from a legitimate supplier, not an APP scam. The evidence does not support that the seller intended to defraud Mr K from the outset, particularly given that the seller met Mr K in person to allow inspection before payment and was initially contactable afterwards—atypical of scammer behaviour. The Reimbursement Rules do not provide general consumer protection for defective goods; they apply only to specific APP scam circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website