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

Decision detail

Summary

Mrs S complained that Halifax should reimburse £9,910 she paid to K, a make-up artist she met at a bridal show, claiming she was the victim of a scam. Between January and May 2025, Mrs S made seven payments to K for various business development purposes including event attendance, training, and website design. Mrs S later discovered that K had charged inflated prices for services and that K was allegedly a con artist who had defrauded others. The ombudsman found that although Mrs S was dissatisfied with the quality and cost of K's services, the payments were not an APP scam under the PSR Reimbursement Rules because Mrs S paid the intended recipient for the intended purposes. The ombudsman classified the dispute as a private civil matter regarding cost and quality of services, for which Halifax bore no responsibility. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the PSR Reimbursement Rules definition of APP scam, which requires that either the recipient was not who the consumer intended to pay, or the payment was not for the purpose intended. Mrs S paid the party she intended to pay (K) and the payments were used for the purposes intended (event attendance, training, website creation), even though the quality and cost were unsatisfactory. The ombudsman found this to be a private civil dispute regarding cost and quality of services, not criminal fraud or dishonesty. The fact that K refunded £1,500 was indicative of a civil dispute, as scammers rarely reimburse victims. Regarding Halifax's duty to intervene, the ombudsman found the payments were in line with previous account activity and that Mrs S would have explained the legitimate business purpose, so intervention would not have prevented the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website