Upheld: scam reimbursement under CRM Code complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr W, a director of company B, purchased two vehicles from Person A but did not receive them or his funds returned, suspecting a scam. Barclays initially declined to reimburse, treating it as a civil dispute. The FOS investigator upheld the complaint, finding Mr W was a scam victim entitled to reimbursement under the CRM Code. Barclays agreed Mr W was a scam victim but proposed reimbursing only the loss less any court award. The ombudsman upheld the complaint, requiring Barclays to reimburse the full £13,500 plus 8% interest, as the CRM Code contains no provision allowing deductions based on potential future recoveries, though Barclays may take an assignment of rights to prevent double recovery.

The Ombudsman's reasoning

The Contingent Reimbursement Model (CRM) Code requires firms to reimburse customers who are victims of APP scams without any provision allowing businesses to decline reimbursement based on assumptions about future recoveries. While Barclays expressed concerns about potential double recovery and the challenges of assignment of rights, the Code contains no such carve-out. The ombudsman found it unfair to decline payment based on assumptions about Person A's actions, particularly given his fraud convictions. However, Barclays is entitled to take an assignment of rights to any future distributions Mr W receives to prevent unjust enrichment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website