Not upheld: Authorised Push Payment (APP) scam claim / payment for defective services complaint against HSBC UK Bank Plc trading as first direct

Decision detail

Summary

Mr F and Mrs P contracted with builder A in October 2023 for £220,000 in building works and paid approximately £116,000 between October 2023 and March 2024. By February 2024, they became concerned about project progress and later discovered significant issues with the work through independent surveys. After the relationship broke down, Mr F claimed the payments were an APP scam and requested reimbursement from first direct in July 2025, which was declined. The ombudsman found that while the work was defective and incomplete, the evidence did not demonstrate that the builder intended to defraud from the outset, as he carried out work over six months under a detailed contract and his bank records showed activity consistent with a genuine tradesperson. Therefore, the complaint constituted a private civil dispute outside the scope of the CRM Code, and the ombudsman did not uphold the complaint.

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. The key issue was whether the builder intended to defraud from the outset. The ombudsman found that the builder carried out work over six months, had a detailed contract with payment schedules, and the bank records showed activity consistent with a genuine tradesperson. The poor quality of work and incomplete project do not demonstrate deliberate deceit. The relationship breakdown and attempts at resolution through legal channels indicated a private civil dispute rather than a scam. Therefore, the complaint fell outside the scope of the CRM Code.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website