Not upheld: Authorised Push Payment (APP) Scam / Fraud - Reimbursement Claim complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr C invested £125,000 in a property development company H between December 2019 and November 2020 and received no returns. He claimed Halifax should reimburse him as a victim of an APP scam. Halifax declined, stating it was a failed investment and civil dispute. The ombudsman found the complaint did not meet the CRM Code definition of an APP scam because there was no evidence that H intended a fraudulent purpose different from Mr C's understanding. Administrators' investigations into H found no fraud, and H had completed legitimate development projects and paid returns to other investors. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman considered whether the complaint met 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 ombudsman found that H had a legitimate business purpose (property development), completed three projects, was paying returns to other investors, and administrators' investigations found no evidence of fraud. Therefore, there was insufficient evidence that H's purpose differed from Mr C's understanding. While the transactions were out of character, the ombudsman was not persuaded that appropriate questioning by Halifax would have prevented the payment, given H's apparent legitimacy at the time.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website