Not upheld: scam reimbursement / Authorised Push Payment (APP) scam claim complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

Mr A paid £1,500 to Company M for a pilgrimage travel package arranged by Mr W but never received the tickets. Mr A reported the matter to Virgin Money as a scam, but Virgin Money declined reimbursement, classifying it as a civil dispute. The ombudsman applied the Faster Payments Scheme Reimbursement Rules and found that while Ms K provided evidence suggesting Mr W may have intended to misappropriate funds, there was insufficient evidence to establish fraud more likely than not. Key factors included Mr W's legitimate prior dealings with Mr A, the absence of multiple fraud reports on the receiving account, and Company M's appearance as a genuine travel agency. The complaint was not upheld, though Santander had reimbursed Mr A's separate payment from their account.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme and CHAPS Reimbursement Rules definition of an APP scam, which requires evidence that a person used fraudulent or dishonest conduct to deceive a consumer. The threshold for establishing fraud is high (more likely than not). While Ms K provided evidence suggesting Mr W may have intended to misappropriate funds, the ombudsman found this was outweighed by: (1) Mr W's legitimate prior dealings with Mr A two years earlier; (2) the absence of multiple fraud reports on the receiving account despite allegations Mr W had done this before; and (3) Company M's account appearing to operate as a genuine travel agency with legitimate transactions and customer refunds. The ombudsman concluded there was insufficient evidence to establish that Mr W did not intend to provide the travel package when requesting payment, meaning the matter could not be classified as a scam under the Reimbursement Rules.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website