Upheld: Authorised Push Payment (APP) scam - failure to reimburse complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6344517 of 2026-06-10T00:00:00+00:00. Authorised Push Payment (APP) scam - failure to reimburse complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6344517 |
|---|---|
| Decision date | 2026-06-10T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | Other regulated product |
| Claim type | Authorised Push Payment (APP) scam - failure to reimburse |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must: (1) Reimburse the company's full financial loss (£38,086.50 less £4,461.13 returns received = £33,625.37) plus (2) Pay interest at 8% simple per annum calculated from the date of the investigator's view until settlement date, with tax deduction certificate provided if requested. Starling may take assignment of rights to future distributions from the liquidation process before paying compensation, subject to providing a draft assignment to Mr L for agreement. |
Summary
Company I, through its director Mr L, invested £38,086.50 in what appeared to be a legitimate assisted living facility investment scheme operated by company U. After U went into administration and the investment failed to proceed as expected, Mr L discovered the scheme was fraudulent and requested reimbursement from Starling Bank Limited. Starling declined, arguing U was not operating a scam. The ombudsman upheld the complaint, finding that U had engaged in dishonest deception by misrepresenting its FCA authorisation, government relationships, property portfolio, and provider relationships. The ombudsman determined the payments met the CRM Code definition of an APP scam and that Starling's generic warnings about safe account scams were ineffective and not specific to investment fraud. Mr L had a reasonable basis for believing the investment was legitimate based on professional documentation and due diligence. Starling was instructed to reimburse the full loss plus 8% interest.
The Ombudsman's reasoning
The ombudsman found that U operated a scam by dishonestly deceiving investors about the nature and legitimacy of the investments offered. The purpose Mr L had in mind (legitimate investment) differed significantly from U's actual purpose (fraudulent scheme), meeting the CRM Code definition of an APP scam. Starling's warnings were not effective as they addressed safe account scams rather than investment scams, and Mr L had a reasonable basis for believing the investment was legitimate based on the professional documentation, company research, positive reviews, and personal interactions with U's representatives. Therefore, Starling could not rely on CRM Code exceptions to deny reimbursement.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 992 | 25% |
| Other regulated product, all decisions | 52,408 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website