Upheld: Authorised Push Payment (APP) scam - fraud reimbursement under CRM Code complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6368491 of 2026-05-21T00:00:00+00:00. Authorised Push Payment (APP) scam - fraud reimbursement under CRM Code complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6368491 |
|---|---|
| Decision date | 2026-05-21T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | current account |
| Claim type | Authorised Push Payment (APP) scam - fraud reimbursement under CRM Code |
| Outcome | Upheld |
| Remedy | Refund of £20,000 plus 8% simple interest per year calculated from 2 April 2026 until settlement date. Starling is entitled to take an assignment of rights to any future distributions from ongoing investigations or court proceedings, subject to providing a draft assignment to Mr F and Mrs F for their agreement first. |
Summary
Mr F and Mrs F invested £20,000 with company X through their friend and former manager J in August 2022, believing it was a legitimate Forex trading investment. After six months the trading app froze and they discovered the FCA was investigating X. They received no returns and could not withdraw their funds. Starling refused to refund them under the CRM Code, arguing the investment was not an APP scam. The ombudsman found that X had fraudulently obtained the funds through false claims of regulation, unsubstantiated returns, and misuse of funds (with less than 12% returned to investors and funds diverted to cryptocurrency exchanges and personal accounts). Although the customers were instructed to misrepresent the payment purpose and made the payment to a personal account, they had a reasonable basis for believing the investment was genuine given their relationship with J, professional documentation, and apparent returns to other investors. Starling's warning was ineffective as it did not address investment fraud. The ombudsman upheld the complaint and ordered a full refund of £20,000 plus 8% interest from 2 April 2026.
The Ombudsman's reasoning
The ombudsman found that Mr F and Mrs F met the definition of an APP scam victim under the CRM Code because they transferred funds believing they were for a legitimate investment purpose, but J/X obtained the funds through dishonest deception. The evidence showed X falsely claimed regulation, promised unsubstantiated returns, and used less than 12% of funds for the stated purpose, with the remainder going to cryptocurrency exchanges and personal accounts. Although Starling argued the customers should have been concerned about red flags (high returns, personal account, instruction to lie about payment purpose), the ombudsman found Mr F and Mrs F had a reasonable basis for believing the investment was genuine given J's trusted relationship with them, professional documentation, and apparent returns to other investors. The warning Starling provided was not effective as it focused on safe account scams and did not resonate with the circumstances of this investment fraud. Therefore, Starling could not rely on exceptions to reimbursement under the CRM Code.
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