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 signed by the company's director Mr H. After making initial payments from his Barclays account, Mr S became concerned about alleged misrepresentations, including that the director did not own 100% of the company and that a solicitor witness had not been formally instructed. Mr S refused to complete the remaining payments and complained to Barclays seeking reimbursement as a victim of an investment scam. Barclays declined to reimburse, and the ombudsman upheld this decision, finding that Mr S had not provided sufficient evidence to establish that the circumstances met the definition of an APP scam under the Faster Payments Scheme reimbursement rules, and that the matter appeared to be a private civil dispute rather than criminal fraud.

The Ombudsman's reasoning

The ombudsman applied the definition of an APP scam under the Faster Payments Scheme reimbursement rules, which requires evidence of a fraudulent or dishonest act or course of conduct to manipulate, deceive or persuade the consumer. The ombudsman found that while Mr S alleged misrepresentations, he had not provided sufficient evidence to establish on the balance of probabilities that the director of Company L acted with dishonest intent at the point the agreement was entered into. The ombudsman noted that it would be unusual for a fraudster to make no effort to conceal their identity, there was no evidence of similar complaints from other parties, and Mr S had not clearly explained what specific information caused him to reconsider the investment. The ombudsman concluded that the circumstances appeared to be a private civil dispute regarding a share purchase agreement rather than an APP scam involving criminal fraud or dishonesty.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website