Upheld: Fraud reimbursement (APP scams) complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6257340 of 2026-06-22T00:00:00+00:00. Fraud reimbursement (APP scams) complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6257340 |
|---|---|
| Decision date | 2026-06-22T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | Current account |
| Claim type | Fraud reimbursement (APP scams) |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must: (1) reimburse T the remaining £5,000; (2) apply 8% simple interest on this sum from the date Starling accepted the claim to the date of settlement; (3) optionally take assignment of rights to future distributions from the liquidation process to avoid double recovery, subject to providing a draft assignment to T for consideration and agreement first. |
Summary
Mr C transferred £10,000 to an unregulated investment fund (V) promoted as a Forex trading vehicle in September 2022, which proved to be a sophisticated investment scam. Starling initially refunded only 50% (£5,000), arguing Mr C lacked reasonable basis for belief in V's legitimacy given his financial background. The ombudsman found the scam was highly sophisticated with professional presentations, Companies House registration, apparent regulatory progress, and a personal connection to an FCA-authorised promoter, meaning Mr C reasonably believed it was legitimate. The ombudsman upheld the complaint and required Starling to refund the remaining £5,000 plus 8% simple interest, finding Starling could not fairly rely on the CRM Code exception to reimbursement.
The Ombudsman's reasoning
The ombudsman found that despite Mr C's involvement in financial matters, he did not hold formal financial qualifications or FCA authorisation and operated as a non-regulated adviser. The scam was sophisticated with professional presentations, Companies House registration, and apparent CSSF registration process - not a typical cold-call scam. Mr C knew the promoter personally (an FCA-authorised individual), attended formal meetings, and there was nothing in the public domain at the time that would have reasonably indicated a scam. The ombudsman concluded Mr C had a reasonable basis for believing V was legitimate, and Starling failed to provide adequate warnings about the importance of FCA registration. Therefore, Starling cannot fairly rely on the exception to reimbursement under the CRM Code.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 1,021 | 25% |
| Fraud reimbursement (APP scams), all decisions | 20,976 | 21% |
| Current account, all decisions | 52,014 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website