Not upheld: Authorised Push Payment (APP) scam claim and customer service failures complaint against HSBC UK Bank Plc (trading as first direct)

Decision detail

Summary

Mr S purchased a canvas for £250 at a hotel stall and paid by faster payment, providing his personal and banking details to the sellers. When the tracking receipt showed a different address initially and the item value as £100, Mr S became suspicious and refused delivery. He claimed this was an APP scam and requested reimbursement from First Direct. First Direct declined, classifying it as a civil dispute rather than a scam, and offered £75 compensation for service failures. The ombudsman upheld First Direct's decision, finding no evidence of fraudulent intent by the sellers and determining the transaction did not meet the Faster Payment Scheme Reimbursement Rules definition of an APP scam, while confirming the £75 compensation for service failures was fair.

The Ombudsman's reasoning

The ombudsman applied the Faster Payment Scheme Reimbursement Rules which require that a payment must have been made as part of an APP scam involving fraudulent or dishonest deception. The ombudsman found no convincing evidence that the sellers intended to scam Mr S or deceive him into making a payment for a purpose he did not intend. The fact that an item was sent via a genuine delivery company, the parcel weight was consistent with a canvas, and the beneficiary bank reported no fraud concerns all indicated the sellers likely intended to fulfil the order. While the sellers' conduct was unprofessional, this amounted to a civil dispute rather than a criminal scam. The £75 compensation for service failures was deemed fair and reasonable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website