Not upheld: scam reimbursement claim under Faster Payments Scheme reimbursement rules complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr R complained that HSBC should reimburse him for a faster payment made to Builder A for renovation work, claiming he was the victim of a scam. Builder A failed to complete all agreed work and supply all materials, but substantial work was carried out over two months. HSBC declined to reimburse, treating it as a civil dispute. The ombudsman found that the transaction did not meet the Faster Payments Scheme reimbursement rules' definition of an APP scam because Builder A demonstrated the intention to perform the agreed services at the time of receiving payment, and the situation constituted a private civil dispute rather than fraud. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the FPS reimbursement rules definition of an APP scam, which requires that either the recipient is not who the consumer intended to pay, or the payment is not for the purpose the consumer intended. The ombudsman found that although Builder A failed to complete all work and supply all materials, the substantial work carried out over two months demonstrated that Builder A had the intention to carry out the agreed works at the time of receiving the funds. Therefore, the purpose Mr R had in mind did not differ significantly from Builder A's purpose, meaning the transaction did not meet the APP scam definition. The ombudsman also noted that private civil disputes are excluded from the reimbursement rules, and this situation fell within that exclusion.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website