Upheld: Authorised Push Payment (APP) scam - irresponsible failure to reimburse complaint against HSBC UK Bank Plc
Financial Ombudsman decision DRN-6351913 of 2026-06-10T00:00:00+00:00. Authorised Push Payment (APP) scam - irresponsible failure to reimburse complaint against HSBC UK Bank Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6351913 |
|---|---|
| Decision date | 2026-06-10T00:00:00+00:00 |
| Firm | HSBC UK Bank Plc |
| Product | Investment |
| Claim type | Authorised Push Payment (APP) scam - irresponsible failure to reimburse |
| Outcome | Upheld |
| Remedy | HSBC must refund £36,595.50 (total investment of £42,000 less returns received of £5,404.50) plus simple interest at Bank of England base rate plus 1% calculated on a time-weighted basis from 15 days after 15 September 2025 until settlement. HSBC is entitled to take assignment of rights to future distributions from the administration process to avoid double recovery. |
Summary
Mr G invested £42,000 in Buy2Let/Raedex Consortium Ltd between February and late 2020, believing his funds would purchase specific new vehicles for lease with monthly capital repayment and interest returns. The company went into liquidation after Mr G received only £5,404.50 in returns. When Mr G claimed in September 2025 that he was a scam victim, HSBC declined reimbursement, characterising it as a civil dispute. The ombudsman upheld the complaint, finding the investment met the CRM Code definition of an APP scam because the company did not operate according to its promised business model - it held far fewer vehicles than loan agreements and did not secure specific vehicles against individual investments - and this resulted from dishonest deception by the company directors (later charged by the SFO for fraud). HSBC was required to reimburse £36,595.50 plus interest as none of the CRM Code exceptions applied and Mr G had a reasonable basis for believing the investment was legitimate.
The Ombudsman's reasoning
The ombudsman concluded that Mr G's payments met the CRM Code definition of an APP scam because there was a clear discrepancy between the payment purposes Mr G and the company intended. Mr G believed his funds would purchase specific new vehicles for lease, but the company did not operate according to this model - it held far fewer vehicles than loan agreements, used second-hand vehicles contrary to the business model, and did not secure specific vehicles against individual investments. The SFO's charges against the directors for providing false information and encouraging investment while knowing vehicles were not backed up by promised cars demonstrated dishonest deception. The ombudsman rejected HSBC's argument to delay pending court proceedings, finding that the balance of probabilities standard (not beyond reasonable doubt) applied, and that sufficient evidence was already available. None of the CRM Code exceptions to reimbursement applied because Mr G had a reasonable basis for believing the investment was legitimate - the investment terms were not suspicious, returns were not unrealistic, the company appeared professional and had operated for years, and there was nothing in the public domain suggesting a scam.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSBC UK Bank Plc, all decisions | 7,504 | 23% |
| Investment, all decisions | 13,970 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website