Upheld: Authorised Push Payment (APP) scam - irresponsible failure to reimburse under CRM Code complaint against HSBC UK Bank Plc
Financial Ombudsman decision DRN-6334891 of 2026-06-05T00:00:00+00:00. Authorised Push Payment (APP) scam - irresponsible failure to reimburse under CRM Code complaint against HSBC UK Bank Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6334891 |
|---|---|
| Decision date | 2026-06-05T00:00:00+00:00 |
| Firm | HSBC UK Bank Plc |
| Product | Investment |
| Claim type | Authorised Push Payment (APP) scam - irresponsible failure to reimburse under CRM Code |
| Outcome | Upheld |
| Remedy | Refund of £95,000 plus simple interest calculated using the time-weighted average of the Bank of England base rate plus one percentage point from the date HSBC declined the claim to the date of settlement. HSBC is entitled to take an assignment of rights to future distributions under the administrative process to avoid double recovery. |
Summary
Mr A and Mr A(2) invested £95,000 in company G between May 2022, believing the funds would purchase and install air conditioning units for a hotel chain contract. Company G misrepresented the existence of an insurance policy, inflated contract revenues, and misused investor funds for personal spending and unexplained international transfers before going into administration. HSBC declined Mr A's fraud claim, characterizing it as a civil dispute. The ombudsman upheld the complaint, finding that Mr A was the victim of an APP scam under the CRM Code and that HSBC could not rely on any exception to reimbursement, requiring HSBC to refund £95,000 plus interest.
The Ombudsman's reasoning
The ombudsman determined that Mr A's payments met the definition of an APP scam under the CRM Code because G obtained the funds through dishonest deception for purposes materially different from those stated to Mr A. The evidence showed that far more money was obtained from investors than was used for the stated purpose, with significant personal spending and unexplained transfers. The ombudsman rejected HSBC's reliance on the 'reasonable basis of belief' exception because Mr A had reasonable grounds to believe the investment was legitimate based on the family member's recommendation, Companies House verification, office visits, and the purported insurance policy. The ombudsman also rejected HSBC's attempt to rely on R3(1)(c) to delay decision-making because HSBC had already made a final decision declining the claim without invoking that clause.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSBC UK Bank Plc, all decisions | 7,504 | 23% |
| Investment, all decisions | 13,970 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website