Not upheld: scam reimbursement - Authorised Push Payment (APP) scam claim complaint against Starling Bank Limited

Decision detail

Summary

Mr D paid Company A to arrange holidays to Morocco. After a successful initial booking, Mr D booked two additional holidays but Company A subsequently informed him the bookings could not be confirmed and ceased communication without providing refunds. Mr D requested reimbursement from Starling Bank, claiming he was the victim of a scam. Starling declined, characterising it as a civil dispute. The ombudsman upheld Starling's decision, finding that while Mr D suffered financial loss, the evidence does not demonstrate that Company A engaged in fraudulent or dishonest conduct meeting the definition of an APP scam under the Faster Payments Scheme reimbursement rules, as Company A initially operated legitimately and Mr D received at least one successful holiday.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme reimbursement rules definition of an APP scam, which requires demonstration that a person used fraudulent or dishonest conduct to manipulate or deceive a consumer into transferring funds for a purpose different from what the consumer intended. While Mr D did not receive all goods and services paid for, the evidence does not sufficiently demonstrate that Company A had a different purpose in mind when receiving the payments. Company A operated as a legitimate business initially, Mr D received at least one successful holiday, and the company's failure could result from genuine business difficulties rather than fraudulent intent. The ombudsman found the evidence could indicate poor administration or external cancellations rather than deliberate fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website