Upheld: Authorised Push Payment (APP) Scam - Investment Fraud / Failure to Reimburse under CRM Code complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6356351 of 2026-05-28T00:00:00+00:00. Authorised Push Payment (APP) Scam - Investment Fraud / Failure to Reimburse under CRM Code complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6356351 |
|---|---|
| Decision date | 2026-05-28T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | current account |
| Claim type | Authorised Push Payment (APP) Scam - Investment Fraud / Failure to Reimburse under CRM Code |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must: (1) refund W's outstanding loss of £12,900; and (2) pay simple interest on the refund using time-weighted average Bank of England base rate plus one percentage point, from 24 April 2026 (date of Investigator's view) until date of settlement. The £100 compensation previously offered by Starling for delay in providing a reimbursement decision is deemed fair and no additional compensation is required. |
Summary
W, a limited company, invested £16,500 with Company S in May 2024 through a Rent-to-Rent Agreement, expecting monthly returns of £720 over 36 months. After receiving five payments, Company S directors were arrested in January 2025 and the company entered liquidation in July 2025. W complained to Starling in December 2025 claiming an APP scam and seeking reimbursement of the £12,900 outstanding loss. The ombudsman determined that Company S was operating a fraudulent Ponzi-like scheme, not a failed legitimate investment, based on evidence including absence of underlying property agreements, sale of unsuitable properties, and returns exceeding legitimate income. The ombudsman upheld the complaint and directed Starling to reimburse W's loss of £12,900 plus interest under the CRM Code, finding that no valid exceptions to reimbursement applied.
The Ombudsman's reasoning
The ombudsman determined that Company S was operating a fraudulent investment scheme rather than a failed legitimate investment, based on multiple pieces of evidence considered collectively: the absence of underlying property agreements, sale of non-existent or unsuitable properties, disproportionate transfer of funds to another suspected scam entity, and returns paid to investors exceeding legitimate income by 50% (indicative of a Ponzi scheme). The payment to the solicitor did not prevent CRM Code application as the solicitor was acting as a conduit for Company S, not as W's independent representative. W had a reasonable basis for believing Company S was legitimate at the time of investment given the professional presentation, solicitor involvement, positive online reviews, and investor testimonials. Starling's scam warnings were not 'Effective Warnings' under the CRM Code as they were irrelevant to investment fraud and therefore could not have had a material effect on preventing the scam. No valid exceptions to CRM Code reimbursement applied.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 992 | 25% |
Source
Read the original decision on the Financial Ombudsman Service website