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

Decision detail

Summary

Mr S, on behalf of his company I, complained to Barclays Bank UK PLC seeking reimbursement for a payment made towards a £175,000 investment in a 25% shareholding in Company L. Mr S claimed he was the victim of an investment scam after discovering alleged misrepresentations about the company's ownership structure and the involvement of a solicitor. The ombudsman assessed the complaint against the Faster Payments Scheme reimbursement rules definition of an APP scam, which requires evidence of fraudulent or dishonest conduct. Although Mr S raised concerns about misrepresentations, the ombudsman found insufficient evidence to establish on the balance of probabilities that the director of Company L acted dishonestly or fraudulently when the agreement was entered into. The ombudsman noted the absence of corroborating evidence, lack of similar complaints, and concluded the matter appeared to be a private civil dispute rather than criminal fraud. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Faster Payments Scheme reimbursement rules definition of an APP scam, 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 raised concerns about misrepresentations, he had not provided sufficient evidence to establish on the balance of probabilities that the director of Company L acted dishonestly or fraudulently at the point the agreement was entered into. Key factors included: the fraudster made no apparent effort to conceal identity or location (unusual for fraud); no evidence of similar complaints from other parties; Mr S's failure to pay the full purchase price did not entitle him to shares under the contract; the deterioration in the relationship appeared to occur after initial payments; and Mr S had not clearly explained or evidenced what specific information caused him to reconsider the investment. The ombudsman concluded this appeared to be a private civil dispute rather than criminal fraud.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website