Not upheld: fraud reimbursement claim under Reimbursement Rules complaint against HSBC UK Bank Plc

Decision detail

Summary

Miss O engaged Company L to carry out property renovations and made staggered payments between February and April 2025. After discovering that significant work had not been completed, she claimed she had been defrauded and requested reimbursement from HSBC. HSBC rejected the claim as a private civil dispute rather than fraud. The ombudsman examined whether the circumstances met the definition of an Authorised Push Payment (APP) scam under the Reimbursement Rules. Despite Miss O's assertions of fraud, the ombudsman found that the substantial amount of work completed, the provision of video updates explaining delays, and the apparent intent to complete the project until a dispute arose all indicated this was a case of poor business practice and project mismanagement rather than premeditated fraud. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules which require reimbursement of authorised push payments in APP scams but exclude private civil disputes. An APP scam requires fraudulent or dishonest conduct to manipulate or deceive a consumer. The ombudsman found it unlikely that a person intent on defrauding Miss O would employ numerous contractors, purchase significant materials, and complete much of the work at considerable cost. The significant amount of work completed, the provision of video updates explaining delays, the apparent intent to complete the project until a dispute arose, and the lack of evidence of fraud from law enforcement or Trading Standards all weighed against a finding of fraud. The ombudsman concluded the circumstances more likely constituted a private civil dispute involving poor business practice and project mismanagement rather than criminal fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website