Upheld: Authorised Push Payment (APP) Scam - Failure to Reimburse under CRM Code complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6370378 of 2026-06-05T00:00:00+00:00. Authorised Push Payment (APP) Scam - Failure to Reimburse under CRM Code complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6370378 |
|---|---|
| Decision date | 2026-06-05T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | Current account |
| Claim type | Authorised Push Payment (APP) Scam - Failure to Reimburse under CRM Code |
| Outcome | Upheld |
| Remedy | Starling Bank Limited must reimburse Mrs J £442.70 (Starling's proportionate share of the outstanding loss of £2,164.23, calculated as 0.204551266% based on Mrs J's £4,000 contribution out of £19,555 total from Starling and Bank M). Starling must also pay simple interest on £442.70 at the time-weighted average Bank of England base rate plus one percentage point, calculated from 13 May 2026 (date of Investigator's view) until the date of settlement. Starling may take an assignment of Mrs J's rights to all future distributions from the Official Receiver and police investigations to avoid double recovery. |
Summary
Mrs J complained that Starling Bank Limited failed to reimburse her £4,000 sent to Company S in December 2023 as part of an alleged APP scam. Her husband had invested £67,055 across three investments with Company S between August 2023 and September 2024, receiving £40,505 in returns before the scheme collapsed. The ombudsman found that Company S was operating a Ponzi scheme, using only 15% of investment capital for its stated purpose and using new investors' funds to pay returns to existing investors. The ombudsman determined that Mrs J had a reasonable basis for believing Company S was legitimate at the time of her payment and that none of the CRM Code exceptions to reimbursement applied. Starling was directed to reimburse Mrs J £442.70 (her proportionate share of the outstanding loss) plus interest.
The Ombudsman's reasoning
The ombudsman determined that Company S was operating a Ponzi scheme rather than a legitimate failed investment. The evidence showed Company S was using new investors' funds to pay returns to existing investors and for personal gain, with only 15% of capital used for its stated purpose. The ombudsman found that Mrs J had a reasonable basis for believing Company S was legitimate at the time of her payment in December 2023, as there was no adverse information available and Mr J had received promised returns. The ombudsman concluded that none of the CRM Code exceptions to reimbursement applied: Mrs J had a reasonable basis for belief, the warnings provided were generic and not effective, and the inability to prevent the loss is not a valid exception under the CRM Code. Therefore, Starling should reimburse Mrs J's proportionate share of the loss.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 992 | 25% |
| Current account, all decisions | 45,590 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website