Upheld: Authorised Push Payment (APP) Scam - Failure to Reimburse complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6242484 of 2026-04-23T00:00:00+00:00. Authorised Push Payment (APP) Scam - Failure to Reimburse complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6242484 |
|---|---|
| Decision date | 2026-04-23T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | current account |
| Claim type | Authorised Push Payment (APP) Scam - Failure to Reimburse |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must refund N's outstanding loss of £13,620 and pay 8% simple interest per annum from 22 January 2026 until the date of settlement. The ombudsman noted that Starling could take an assignment of rights to future distributions from Official Receiver and police investigations to avoid double recovery. |
Summary
N, a limited company, invested £16,500 with Company S through a solicitor in June 2024 for a claimed social housing rent-to-rent opportunity, receiving four monthly returns before Company S's directors were arrested in January 2025 and the company entered liquidation in July 2025. N claimed reimbursement from Starling Bank under the Contingent Reimbursement Model (CRM) Code, which Starling refused, characterising the loss as a civil dispute rather than an APP scam. The ombudsman found that Company S was operating a fraudulent scheme, evidenced by the absence of underlying property agreements, diversion of funds to another suspected scam, and returns exceeding legitimate income by 50%, indicating a Ponzi scheme. The ombudsman concluded that N had a reasonable basis for believing Company S was legitimate and that Starling had no valid exceptions to reimbursement under the CRM Code, therefore upholding the complaint and directing reimbursement of £13,620 plus 8% interest.
The Ombudsman's reasoning
The ombudsman concluded that Company S was, on the balance of probabilities, operating a fraudulent scheme rather than a legitimate but failed investment. Key evidence included: Company S sold investments without securing underlying property agreements; properties were unbuilt or unsuitable for social housing; legitimate income did not scale with investment received; two-thirds of funds were diverted to another suspected scam (Company C); and returns paid to investors exceeded legitimate income by 50%, suggesting a Ponzi scheme. The payment to the solicitor did not prevent the CRM Code from applying as the solicitor was acting as a conduit for Company S, not as N's independent representative. N had a reasonable basis for believing Company S was legitimate given the professional contract, SRA-authorised solicitor involvement, positive online reviews, and accountant consultation. Starling failed to demonstrate any valid exceptions to reimbursement under the CRM Code applied.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 992 | 25% |
Source
Read the original decision on the Financial Ombudsman Service website