Not upheld: fraud reimbursement claim - authorised push payment (APP) scam vs private civil dispute complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr E paid a contractor (G) for property upgrades during a construction project in July and August 2025. When he visited the property in November 2025, much of the work remained incomplete. After the contractor was dismissed from the site following a dispute with landowners, Mr E claimed fraud and sought reimbursement from HSBC. HSBC and the FOS investigator concluded it was a civil dispute. The ombudsman upheld this assessment, finding that while the work was incomplete, the evidence did not support fraudulent intent: G was a legitimate registered business, the contractor remained on site working for months after payment, and there was a plausible explanation involving disputes over additional works. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules which require reimbursement of authorised push payments in APP scams but exclude private civil disputes. The key question was whether this constituted fraud or a civil dispute. The ombudsman found that while the work was incomplete, the evidence did not support an intention to defraud: G was a legitimate registered business, the contractor remained on site working for months after payment, the contractor was dismissed by landowners rather than abandoning the site, and there was a plausible explanation that disputes over additional works led to the contractor retaining funds. The ombudsman concluded that requesting upfront payment and disputes over scope of work are commonplace in construction and insufficient to establish fraudulent intent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website