Not upheld: APP scam refund claim and failure to prevent fraud complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs A paid £5,000 to D for visa sponsorship and employment services for a friend, but the services were not provided as promised. She claimed this was an APP scam and sought a refund from Lloyds. The ombudsman found that while a third party (F) used by D was likely running a scam, there was no evidence D was complicit or acted fraudulently. Furthermore, the payments were consistent with Mrs A's regular account activity, so Lloyds was not obligated to intervene. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while F was likely running a scam, there was no evidence that D was party to or aware of the scam. The CRM Code requires proof that the recipient obtained funds with fraudulent intent, which was not established. Additionally, the payments were not unusual compared to Mrs A's regular account activity, so Lloyds had no obligation to intervene. The ombudsman balanced the need to identify fraudulent payments against minimising disruption to legitimate transactions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website