Partially upheld: Authorised Push Payment (APP) scam claim / payment dispute classification complaint against Monzo Bank Limited

Decision detail

Summary

Mr K paid tradesperson P £4,400 for landscaping work to the rear of his property after P became aggressive and threatened to undo work when Mr K raised concerns about quality and incomplete work. Mr K reported this to Monzo as an APP scam, but Monzo declined to reimburse, classifying it as a civil dispute. The ombudsman upheld Monzo's decision that this was not an APP scam under the Faster Payments Scheme Reimbursement Rules, finding that the payment was authorised, went to the intended recipient, and both parties intended it for the landscaping work—not for a fraudulent purpose. While P's work was poor quality and unprofessional, this does not demonstrate criminal intent to defraud. The complaint was partially upheld only to the extent that Monzo must pay £100 compensation for service failings in handling the dispute and complaint.

The Ombudsman's reasoning

The ombudsman applied the Payment Service Regulations 2017 and the Faster Payments Scheme Reimbursement Rules. The payment was objectively authorised by Mr K when he executed it through his mobile banking app, regardless of pressure or duress. To qualify as an APP scam under the Reimbursement Rules, the transaction must involve criminal deception meeting a high threshold of proof (balance of probabilities). The ombudsman found that: (1) the payment went to the intended recipient (P), so the first part of the APP scam definition did not apply; (2) both parties appear to have intended the payment for landscaping work, not for a fraudulent purpose; (3) P's poor workmanship and lack of professional competence do not demonstrate criminal intent to defraud from the outset; (4) P's receipt of other credits and the account's normal operation do not suggest fraud; (5) the fact that P completed some work suggests he intended to complete the agreed work; and (6) P's lack of a business address, while frustrating, does not demonstrate criminal intent at the time of payment. The ombudsman concluded this was a civil dispute over work quality, not a scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website