Not upheld: scam reimbursement claim / APP fraud classification complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

K, a limited company, sought reimbursement from NatWest for a £13,395 payment made to Company W for building materials that were never delivered, claiming it was a victim of an APP scam. NatWest declined reimbursement, and K referred the complaint to the FOS. The ombudsman found that while K acted in good faith and suffered a genuine loss, the circumstances constituted a private civil dispute (breach of contract) rather than an APP scam as defined by the Faster Payments Scheme reimbursement rules. The ombudsman noted that Company W was an established, registered business that remained active, suggesting operational failure rather than fraudulent intent, and that K had a practical remedy available through the civil courts. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the civil standard of proof (balance of probabilities) to determine whether an APP scam had occurred. The key question was whether Company W intended from the outset to take K's money without supplying goods. While this was one possible explanation, the evidence did not establish it as more likely than not. Company W's status as an established, registered business with a trading history and continued active status suggested it was a legitimate business that failed to perform the contract, rather than a fraudulent entity. The ombudsman concluded this was a private civil dispute (a breach of contract) rather than criminal fraud, and that K had a practical remedy available through the civil courts. The ombudsman noted that where a realistic option exists to seek recovery directly from the recipient, it is not fair to expect the bank to cover the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website