Not upheld: fraud claim refusal / APP scam reimbursement complaint against Lloyds Bank PLC

Decision detail

Summary

Miss A paid £3,600 to a home improvement contractor 'P' between October and November 2025, but the work was not completed as expected and communication ceased. She claimed this was a scam and requested Lloyds refund the payments under PSR mandatory reimbursement rules. Lloyds declined, characterizing the matter as a private civil dispute rather than fraud. The ombudsman upheld Lloyds' decision, finding insufficient evidence that P intended to defraud Miss A from the outset. Although P failed to complete the work, the evidence showed some work had commenced and there were legitimate reasons a business might fail to meet its commitments. The complaint was not upheld and no remedy was ordered.

The Ombudsman's reasoning

The ombudsman applied the PSR definition of APP scam, which requires dishonest deception or intent to defraud. The ombudsman found that Miss A's situation fell within the PSR's definition of a private civil dispute—a dispute between consumer and payee for resolution in civil courts rather than involving criminal fraud. Although Miss A did not receive the full service paid for, the evidence showed P had commenced work and there was no persuasive evidence that P intended to defraud Miss A from the outset. The absence of a written agreement made it difficult to determine what specific service P failed to provide as agreed. The ombudsman concluded that a business may act unprofessionally or fail to meet commitments for legitimate reasons other than fraud, and the evidence did not demonstrate fraudulent intent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website