Not upheld: scam claim refusal complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mrs B paid a tradesman £3,500 and £7,000 for driveway work but the tradesman abandoned the project after completing only poor quality initial work. Mrs B reported the payments as a scam after discovering the tradesman had a previous fraud conviction, but Halifax refused to refund the payments, classifying it as a civil dispute. The ombudsman upheld Halifax's decision, finding that while the tradesman's conduct was unprofessional and the work defective, the evidence did not establish that the tradesman intended to defraud Mrs B or that the payment was made for a purpose different from what Mrs B intended. The ombudsman distinguished between a civil dispute over defective services and a scam, concluding the circumstances fell within the former category and therefore fell outside the scope of both the CRM code and the Reimbursement Rules.

The Ombudsman's reasoning

The ombudsman applied the definitions of scam under both the CRM code and the Reimbursement Rules. Both require evidence that the tradesman intended a different purpose for the payment than Mrs B intended, or that the payment was not for the purpose Mrs B intended, and that this resulted from fraud or dishonesty. The ombudsman found that while the tradesman failed to complete the work and carried out poor quality work, this constitutes a civil dispute (defective services) rather than a scam. Key factors supporting this conclusion were: the tradesman had completed satisfactory work for a friend, provided a formal written quote and signed contract, started work as agreed, carried out some substantial work (digger hire, skip hire), no other scam reports existed against the accounts, and no external investigation had concluded the tradesman was operating a scam. The ombudsman distinguished between unprofessional conduct and fraudulent intent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website