Not upheld: Fraud reimbursement (APP scams) complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr S invested £175,000 in a 25% shareholding in Company L under a written agreement, making initial payments from his Barclays account. After making some payments, Mr S became concerned about misrepresentations regarding the company's ownership structure and the involvement of a solicitor, and concluded he was a victim of an investment scam. He requested reimbursement from Barclays, which refused. The ombudsman found that the circumstances did not meet the definition of an APP scam under the Faster Payments Scheme reimbursement rules, as the evidence did not establish on the balance of probabilities that the director acted with dishonest intent at the point the agreement was entered into. The ombudsman noted that Mr S could pursue the matter through civil courts if he believed there were misrepresentations or breach of contract.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme reimbursement rules definition of an APP scam, which requires evidence of fraudulent or dishonest conduct used to manipulate, deceive or persuade the consumer into transferring funds. The ombudsman found that on the balance of probabilities, the evidence did not support a conclusion that the director acted with dishonest intent at the point the agreement was entered into. Key factors included: the director made no apparent effort to conceal identity or location (unusual for a fraudster); no evidence of similar complaints from other parties; Mr S had not provided clear evidence of specific misrepresentations or how information came to light; the solicitor's involvement was limited to witnessing the document; and the deterioration in the relationship appeared to occur after initial payments were made, suggesting a civil dispute rather than a pre-planned scam. The ombudsman noted that Mr S could pursue the matter through civil courts if he believed there were misrepresentations or breach of contract.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website