Not upheld: Fraud reimbursement (APP scams) complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mrs K engaged company A (directed by Mr H) to carry out roof works on her property and made two bank transfers totalling £3,350 (plus £5,000 from her mother). After work commenced, Mrs K identified multiple issues including water ingress and incomplete work. Mr H made attempts to resolve issues but Mrs K remained unsatisfied and claimed she was the victim of a scam. NatWest rejected her reimbursement claim as a civil dispute. The ombudsman upheld NatWest's decision, finding that although the work was defective and incomplete, this constituted a private civil dispute over service quality rather than an APP scam, as Mrs K paid the intended recipient for the intended purpose with no evidence of criminal deception from the outset.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme Reimbursement Rules (effective from 7 October 2024) which exclude 'private civil disputes' from APP scam protection. An APP scam requires evidence of criminal deception where the recipient is not who the consumer intended to pay or the payment is not for the intended purpose. Here, Mrs K paid Mr H's personal account as intended, and the payments were for the agreed purpose of roof works. Although the work was incomplete and of poor quality, this constitutes a dispute over service quality and completion rather than evidence that Mr H intended from the outset to deceive Mrs K. The evidence shows a breakdown in the relationship between parties with disputes over work quality, not criminal fraud. The Payment Systems Regulator's guidance explicitly states that civil disputes where goods/services are defective or incomplete do not meet the definition of APP fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website