Not upheld: Authorised Push Payment (APP) scam / fraud reimbursement claim complaint against Lloyds Bank PLC

Decision detail

Summary

Mr S paid £11,000 to a builder (Mr I) across three separate accounts in January 2026 for home renovations. After approximately five weeks of work, Mr I ceased attending and failed to complete the agreed works. Mr S claimed this was an APP scam and requested reimbursement from Lloyds, which declined on the basis it was a civil dispute. The ombudsman upheld Lloyds' decision, finding that while the circumstances were unfortunate, the evidence did not meet the threshold to prove fraud rather than a civil dispute, particularly given that Mr I had continued working for a month after receiving payments and there were no other fraud complaints against the accounts. The ombudsman applied the civil standard of proof and found that fraud was not 'more likely than not' compared to other explanations such as incompetence or relationship breakdown.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme and CHAPS reimbursement rules, which require evidence that an APP scam occurred. An APP scam requires either that the recipient was not who the consumer intended to pay, or that the payment was not for the purpose intended. The ombudsman found that Mr S knew who the accounts belonged to at the time of payment, so the recipient requirement was not met. Regarding purpose, the ombudsman found insufficient evidence to conclude that Mr I intended to defraud from the outset, noting that Mr I continued working for approximately a month after receiving initial payments, which would be unintuitive for a fraudster. The request to pay three different accounts, while potentially suspicious, did not conclusively indicate fraud intent. The ombudsman applied the civil standard of proof (balance of probabilities) and found that fraud was not 'more likely than not' compared to other explanations such as incompetence or relationship breakdown.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website