Not upheld: scam / fraud claim - refund request complaint against Monzo Bank Limited

Decision detail

Summary

Mr D purchased a car for £999 from a seller through an online marketplace and paid via his Monzo account. After taking possession, the car developed serious mechanical issues and subsequently caught fire. Mr D reported the matter to Monzo as a scam, but Monzo declined to refund, classifying it as a civil dispute. The ombudsman upheld Monzo's decision, finding that the transaction fell outside the definition of an Authorised Push Payment (APP) scam under the Faster Payments Scheme Reimbursement Rules. Although Mr D received defective goods, he paid the intended recipient for the intended purpose, and there was insufficient evidence to establish that the seller intended to defraud him at the time of payment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme Reimbursement Rules definition of an APP scam, which requires fraudulent or dishonest conduct to manipulate a consumer into transferring funds. The ombudsman found that Mr D paid the intended recipient (R) for the intended purpose (purchasing a car) and received the goods he intended to purchase. The subsequent discovery of defects does not constitute an APP scam but rather a civil dispute regarding product quality, which is explicitly excluded from the Reimbursement Rules. The ombudsman applied the civil standard of proof (balance of probabilities) and found insufficient evidence to establish that the seller intended to defraud Mr D at the time of payment. The seller's non-responsiveness and the car's defects could result from unprofessionalism, disorganisation or incompetence rather than fraud. The lack of a substantive police investigation further supported this conclusion.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website