Not upheld: APP scam reimbursement claim complaint against Bank of Scotland plc (trading as Halifax)

Decision detail

Summary

Mr T purchased a second-hand car for £2,700 that was later found to have serious mechanical faults. The seller offered a partial refund of £2,000, which Mr T rejected. When Mr T subsequently discovered the dealership was no longer trading and correspondence was undelivered, he reported the matter to Halifax as an APP scam and requested reimbursement. Halifax declined, characterizing it as a private civil dispute. The ombudsman upheld Halifax's decision, finding that while the transaction was unsatisfactory, the available evidence did not establish fraud on the balance of probabilities as required by the Faster Payments Scheme reimbursement rules, and the circumstances constituted a civil dispute rather than an APP scam.

The Ombudsman's reasoning

The ombudsman applied the civil standard of proof (balance of probabilities) to determine whether an APP scam occurred. While the vehicle had serious faults and the seller subsequently disappeared, these factors alone do not establish fraudulent intent. The seller's initial offer to repair rather than refund, the absence of demonstrably false representations made with knowledge of their falsity, and the possibility of alternative explanations (insolvency, poor administration, incompetence) meant the evidence did not meet the threshold for finding fraud more likely than not. The circumstances constituted a private civil dispute rather than an APP scam as defined by the reimbursement rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website