Not upheld: authorised push payment (APP) scam - refusal to refund first of two payments complaint against Starling Bank Ltd

Decision detail

Summary

Miss C was scammed by fraudsters impersonating Starling who convinced her to transfer £3,200 to a 'safe account' at an EMI in December 2025. She made two debit card payments (£1,200 and £2,000) using one-time passcodes provided by Starling, believing the money would be returned the next day. Starling refunded the second payment but refused to refund the first, citing that both were authorised. The ombudsman found both payments were authorised under the Payment Services Regulations because Miss C authenticated them, and neither payment was sufficiently suspicious to require Starling to intervene. The ombudsman upheld Starling's decision to treat the payments differently, as the second payment (part of a series to the same payee on the same day) was more suspicious than the first (an isolated payment).

The Ombudsman's reasoning

The ombudsman found that both payments were authorised under the PSRs because Miss C authenticated them with one-time passcodes, despite being deceived about the reasons for the payments. While Starling should have been alert to APP scams, the two payments were not sufficiently suspicious to warrant intervention: they were of moderate value, made over an hour apart (not in quick succession), to a new payee, and represented only two transactions rather than a clear pattern of fraud. The ombudsman distinguished the second payment as potentially more suspicious (being part of a series to the same payee on the same day) than the first (an isolated payment), which explained why Starling voluntarily refunded the second but not the first.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website