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

Decision detail

Summary

Mr A lost £8,000 when he paid Mr L to invest in what he believed was a legitimate cryptocurrency investment opportunity with company P. Company P was operating a scam and the funds were lost. Mr A complained to Halifax seeking reimbursement under the Faster Payment Scheme Reimbursement Rules, arguing he was a victim of an APP scam. Halifax declined, treating it as a civil dispute between Mr A and Mr L. The ombudsman found that although P was operating a scam, the payment did not meet the APP scam definition because Mr A paid the intended recipient (Mr L) for the intended purpose (investment with P), and there was insufficient evidence that Mr L intended to defraud Mr A from the outset. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Faster Payment Scheme Reimbursement Rules, which require that for an APP scam to be covered, either the recipient must not be who the consumer intended to pay, or the payment must not be for the purpose the consumer intended. The ombudsman found that Mr A paid Mr L as intended and that the fundamental purpose (funds to be passed to P for investment) was aligned between payer and payee. Although P was operating a scam, the payment journey from Mr A to Mr L to P does not fall within the Reimbursement Rules' definition of an APP scam. The ombudsman was not persuaded on the balance of probabilities that Mr L intended to defraud Mr A from the outset, despite Mr L's refusal to provide cryptocurrency account statements. The ombudsman found it more likely that Mr L was an unknowing victim of P's scam who passed the funds on as intended.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website