Not upheld: scam refund claim - APP fraud complaint against Lloyds Bank PLC

Decision detail

Summary

Mr U paid £5,000 as a deposit to company S for home extension work in May 2025. When S failed to commence work and became unresponsive, Mr U raised a fraud claim with Lloyds on 30 May 2025. However, he subsequently withdrew the claim on 4 June 2025 after allegedly being intimidated by representatives of S. When Mr U re-raised the claim, Lloyds declined to refund, citing a civil dispute. The ombudsman found that the payment was not covered by the Faster Payment Scheme Reimbursement Rules because S was a legitimate supplier with no evidence of fraudulent intent at the time of payment, and the case constituted a civil dispute rather than an APP scam. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Faster Payment Scheme Reimbursement Rules which require evidence that fraudulent deception was used to obtain funds and that the recipient either was not who the consumer intended to pay or the payment was not for the intended purpose. The ombudsman found that S was a legitimate supplier to whom the payment was correctly directed, and there was no evidence that S lacked intention to complete the work at the time of payment. The ombudsman noted that poor business practices and relationship breakdown do not prove fraudulent intent, and that the payment fell within the civil dispute exception to the Reimbursement Rules. Regarding the duress claim, the ombudsman found no evidence in the call recording that Mr U was being forced or told what to say.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website