Upheld: Authorised Push Payment (APP) Scam - Reimbursement Claim complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6256461 of 2026-04-23T00:00:00+00:00. Authorised Push Payment (APP) Scam - Reimbursement Claim complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6256461 |
|---|---|
| Decision date | 2026-04-23T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | current account |
| Claim type | Authorised Push Payment (APP) Scam - Reimbursement Claim |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must refund H's outstanding loss of £12,695 and pay 8% simple interest per annum on the refund from 23 January 2026 until the date of settlement. The ombudsman noted that Starling could take an assignment of rights to future distributions to H from Official Receiver and police investigations to avoid double recovery. |
Summary
H, a limited company, invested £15,555 with Company S through a Rent-to-Rent Agreement in July 2024, paying funds via a regulated solicitor. H received four monthly returns but stopped receiving payments after Company S directors were arrested in January 2025, with Company S subsequently entering liquidation. H claimed reimbursement from Starling Bank as an APP scam victim, but Starling refused, arguing the payment went to a regulated solicitor and was therefore not a scam. The ombudsman upheld H's complaint, finding that Company S was operating a fraudulent Ponzi-like scheme, evidenced by selling investments without securing underlying property agreements, passing two-thirds of investor funds to another suspected scam without disclosure, and paying returns exceeding legitimate income by 50%. The ombudsman concluded H had a reasonable basis for believing Company S was legitimate and that Starling had no valid exceptions to reimbursement under the CRM Code.
The Ombudsman's reasoning
The ombudsman concluded that Company S was, on the balance of probabilities, operating a fraudulent scheme rather than a failed legitimate investment. Key evidence included: Company S sold investments without securing underlying property agreements, sold investments in unbuilt or unsuitable properties, passed two-thirds of investor funds to another suspected scam (Company C) without disclosure, and paid returns to investors that exceeded its legitimate income by 50%, suggesting a Ponzi scheme structure. The ombudsman found H had a reasonable basis for believing Company S was legitimate at the time of investment, given its Companies House registration, positive investor reviews, regulated solicitor involvement, and public information available. The payment to the solicitor did not prevent CRM Code application as the solicitor was acting as a conduit for Company S, not as H's representative. No valid exceptions to reimbursement under the CRM Code were established by Starling.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 981 | 25% |
Source
Read the original decision on the Financial Ombudsman Service website