Not upheld: APP scam refund claim / misclassification of transaction complaint against Santander UK Plc

Decision detail

Summary

Mrs W purchased an emerald through an online auction for £1,398, believing it to be a natural stone based on the listing's presentation, though it was labelled as lab grown in small print at the bottom. Upon receipt and professional appraisal, she discovered it was indeed lab grown and sought a refund from Santander, claiming she was a victim of a scam. Santander declined, characterizing the matter as a private civil dispute. The ombudsman upheld Santander's decision, finding that Mrs W received the item she paid for and that any dispute about the nature or quality of the emerald constitutes a civil matter between her and the auctioneer, not an APP scam under the regulatory definition.

The Ombudsman's reasoning

The ombudsman applied the FPS definition of APP scam, which requires that a consumer be deceived into transferring funds for a purpose not intended. Here, Mrs W received the emerald she paid for; the dispute concerns the nature and quality of the goods rather than the purpose of the payment. Although the listing may have given a misleading impression that the emerald was natural, the information that it was lab grown was included in the listing. This constitutes a private civil dispute between Mrs W and the auctioneer regarding the quality of goods purchased, not an APP scam. The ombudsman concluded that even if the auctioneer misrepresented its status or affiliations, this does not evidence an APP scam if the auctioneer intended to provide the agreed service.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website