Not upheld: alleged authorised push payment (APP) scam; non-delivery of services complaint against Lloyds Bank PLC

Decision detail

Summary

Miss I, on behalf of her limited company M, complained that Lloyds Bank failed to protect her from a £7,000 scam payment to a consultancy firm E in November 2023. E had been engaged to provide consultancy, website and training services but failed to deliver and subsequently closed. The ombudsman found that while E failed to perform its obligations, there was insufficient evidence it was operating as a deliberate scam, as it had legitimate Companies House registration, premises, and annual accounts filings. The complaint fell outside the CRM Code's scope as it constituted a private civil dispute regarding non-delivery by a legitimate supplier rather than an authorised push payment scam. The ombudsman declined to uphold the complaint despite acknowledging Miss I's vulnerability and the financial and emotional impact on her.

The Ombudsman's reasoning

The ombudsman applied the balance of probabilities test to determine whether a scam had occurred. The key finding was that E appeared to be a genuine business with legitimate premises and a Companies House presence, rather than a fraudulent operation set up to deceive. The failure to deliver services, while disappointing, constitutes a private civil dispute (non-delivery of services by a legitimate supplier) which falls outside the scope of the CRM Code under DS2(2)(b). The ombudsman acknowledged Miss I's vulnerability but found nothing in the circumstances of the payment itself that would have alerted Lloyds to potential harm.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website