Not upheld: fraud reimbursement claim under CRM Code complaint against Starling Bank Limited

Decision detail

Summary

Mrs M obtained a bridging loan from Business G but encountered difficulties with the home sale intended to repay it. When Business G pressured her with threats of home possession, Mrs M made a £10,000 payment from her Starling account on 7 February 2024. After the payment, Business G defaulted the loan and appointed receivers. Mrs M claimed reimbursement from Starling under the CRM Code for fraud, but Starling rejected it as a civil matter. The ombudsman upheld Starling's decision, finding that although Mrs M was coerced, the payment was made to a legitimate business for a legitimate debt repayment, not under false pretences, and therefore does not constitute fraud under the CRM Code.

The Ombudsman's reasoning

The ombudsman found that while Mrs M authorised the transaction, the CRM Code only applies to fraud cases. The Code specifically excludes private civil disputes. Although Mrs M was pressured and threatened with home possession, the payment was made to a legitimate business for a legitimate debt (loan repayment), not under false pretences. Fraud requires deliberate deception or dishonest acts designed to cause loss, which is distinctly different from coercion or threats in a civil debt enforcement context. Therefore, the payment does not fall within the scope of the CRM Code, and Starling had no liability to reimburse.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website