Not upheld: APP scam reimbursement claim / private civil dispute complaint against Nationwide Building Society

Decision detail

Summary

Mr A paid a building contractor (P) from company C a total of £7,275 for building work and materials between April and May 2025. Work commenced but was incomplete, and Mr A discovered online allegations that P was a scammer. Mr A claimed reimbursement from Nationwide Building Society under the Authorised Push Payment (APP) Reimbursement Rules. The ombudsman found that although the case was finely balanced, the evidence did not establish that P intended to defraud Mr A from the outset. Since Mr A paid the correct entity (company C) for the stated purpose (building work and materials), and some work was actually performed, the ombudsman classified this as a private civil dispute rather than an APP scam. Accordingly, the complaint was not upheld and Nationwide's decision to decline reimbursement was upheld.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of an APP scam, which requires either that the recipient is not who the consumer intended to pay, or the payment is not for the purpose intended. The ombudsman found that Mr A sent payments to the correct entity (company C) for the intended purpose (building materials and work). While some work was carried out and some materials were received, the ombudsman determined that incomplete performance does not automatically constitute fraud. The ombudsman applied the civil standard of proof (balance of probabilities) and found that the evidence did not convincingly demonstrate that P intended to defraud Mr A from the outset. The ombudsman distinguished between fraud and poor professional conduct, noting that failure to complete work, being unprofessional, or getting into financial difficulties does not automatically evidence fraudulent intent. The ombudsman found the case finely balanced but concluded that fraud was not the most probable explanation for what occurred.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website