Not upheld: scam refund claim - APP scam vs civil dispute complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Miss V engaged a builder (AB/Mr W) for property work and made multiple payments over several months for additional costs. The work was not completed to standard and the builder stopped communicating. Miss V claimed to NatWest that she was a victim of a scam and requested a refund. NatWest declined, classifying it as a private civil dispute. The ombudsman upheld NatWest's decision, finding that although the work was substandard and incomplete, the evidence did not demonstrate criminal deception or fraud. Miss V paid the intended recipient for the intended purpose, and some work was actually completed, making this a contractual dispute rather than an APP scam covered by the reimbursement rules.

The Ombudsman's reasoning

The ombudsman applied the definitions of APP scam under both the CRM Code and the Reimbursement Rules. An APP scam requires either payment to an unintended recipient or payment for an unintended purpose, with evidence of criminal deception. Here, Miss V paid the intended recipient (Mr W) for the intended purpose (property work). Although the work was substandard and incomplete, this constitutes a civil dispute over the quality and extent of services rather than fraud. The evidence showed AB had positive reviews, some work was completed, materials were delivered, and Mr W's bank showed legitimate business activity. Without persuasive evidence that Mr W set out to defraud Miss V from the outset, the ombudsman could not classify this as an APP scam. Poor performance or inability to meet obligations does not equate to fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website