Not upheld: Alleged Authorised Push Payment (APP) scam / fraud claim refusal complaint against Monzo Bank Ltd

Decision detail

Summary

Miss S purchased a car online, paying a total of £3,795 (deposit and balance). After purchase, she discovered the car had serious mechanical faults making it unsafe to drive, contrary to representations made by the seller. Unable to contact the dealer, Miss S claimed to Monzo that she had been the victim of a scam. Monzo declined the claim, classifying it as a civil dispute. The ombudsman upheld Monzo's decision, finding that while Miss S suffered a loss, the transaction did not constitute an APP scam under the Faster Payments Scheme reimbursement rules, as she paid the intended recipient for the intended purpose and received a vehicle, with insufficient evidence of criminal fraud by the seller.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme (FPS) and CHAPS reimbursement rules which define an APP scam as involving criminal deception where the recipient is not who the consumer intended to pay or the payment is not for the intended purpose. Miss S paid the intended recipient (the car seller) for the intended purpose (to buy a car) and did receive a vehicle. While the vehicle had undisclosed faults, there was insufficient evidence to prove the seller acted with intent to defraud rather than simply not realizing the extent of the faults. The seller's bank account showed no fraud concerns and operated legitimately. The matter was therefore classified as a private civil dispute between Miss S and the car dealer, which falls outside the scope of APP scam reimbursement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website