Not upheld: Fraud reimbursement (APP scams) complaint against Monzo Bank Limited

Decision detail

Summary

Mr P invested £11,000 via his Monzo account (part of a £30,000 total investment) in a restaurant business with someone he knew. When the business venture failed and the funds were not returned as promised, Mr P claimed he had been scammed and requested a refund from Monzo. Monzo declined, characterizing the matter as a civil dispute. The ombudsman upheld Monzo's decision, finding that although Mr P had suffered a financial loss, the evidence demonstrated the investment had taken place as intended and the business had subsequently failed, rather than being a fraudulent scheme from the outset. This constituted a civil dispute excluded from APP scam protections under the FPS rules.

The Ombudsman's reasoning

The ombudsman applied the FPS definition of APP scam, which requires that a consumer be deceived about the purpose for which payments were procured. The evidence demonstrated that the investment in the restaurant business did take place as intended, with funds being paid to the restaurant owner and ownership being transferred. Although the business venture ultimately failed and Mr P could not recover his investment, this constituted a civil and contractual dispute rather than fraud. The ombudsman found that even if R had misrepresented aspects of the business arrangement, this did not meet the legal threshold for an APP scam, as R appeared to have intended to use the funds for the stated purpose of the investment. The ombudsman concluded that Monzo correctly assessed the claim and was not obligated to provide a refund.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website