Not upheld: Authorised Push Payment (APP) scam claim / fraud allegation complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr K claimed he was defrauded after placing successful bids on three properties through an online auction portal operated by company D. He paid £7,500 deposits to company B but subsequently received demands for additional payments exceeding £15,000 per property, which he claimed were not disclosed upfront. Mr K reported the matter as a scam to Barclays, which declined to reimburse him as a civil dispute. The ombudsman found that while the contract terms were unfavourable, they were referenced in pre-payment documentation and did not constitute fraud. Company B was a legitimate registered entity with a long trading history and no substantive investigation by authorities, and the beneficiary bank raised no concerns about its account operation. The ombudsman concluded the matter was a private civil dispute rather than an APP scam and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme and CHAPS Reimbursement Rules, which require a finding of criminal deception to classify a transaction as an APP scam. The ombudsman found that Mr K paid the company he intended to pay (B), so the first part of the APP scam definition did not apply. Regarding whether the payment was for a purpose other than intended, the ombudsman concluded that while the contract terms were one-sided and unfavourable, they were provided in the sales memorandum before payment and did not constitute fraud. The ombudsman noted that B was a legitimate registered company with a long trading history, no substantive investigation by authorities, and no concerns raised by the beneficiary bank. The ombudsman concluded that fraud was not the most probable explanation for what occurred, and that the matter more appropriately constituted a private civil dispute regarding contract terms rather than criminal fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website