Not upheld: Authorised Push Payment (APP) scam reimbursement claim complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr M paid builder P £18,000 as a deposit for a £27,000 bathroom extension project after signing a contract on 4 August 2025. P carried out only minimal work and subsequently became uncontactable, leading Mr M to claim he was a victim of an APP scam. HSBC declined reimbursement, classifying the matter as a civil dispute rather than an APP scam. The ombudsman upheld HSBC's decision, finding that while P demonstrated unprofessional practices (substantial upfront deposit, minimal work, false excuses, fake reviews), the evidence from the beneficiary bank showed P was conducting legitimate business operations with other customers and trade suppliers, indicating P likely intended to perform the work but failed due to poor management rather than deliberate fraud. The complaint was not upheld as it did not meet the Reimbursement Rules definition of an APP scam requiring criminal deception.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of APP scam, which requires criminal deception where the recipient is not who the consumer intended to pay or the payment is not for the intended purpose. While P exhibited concerning business practices (substantial upfront deposit, minimal work, false excuses, fake reviews, website membership removal), the evidence did not establish that P had no intent to perform the work at the time of payment. The beneficiary bank's account statements showed P was undertaking legitimate work for other customers and purchasing materials from trade suppliers, indicating genuine business operations. The ombudsman concluded P was an unprofessional and unreliable tradesperson rather than a fraudster, and the scenario that P intended to perform the work but failed due to poor management was more likely than the scenario of deliberate fraud. Therefore, the complaint did not meet the Reimbursement Rules definition of an APP scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website