Not upheld: APP scam claim - refund denial complaint against Monzo Bank Limited

Decision detail

Summary

B, a limited company, made 16 payments totalling £133,699 to building company K for construction work on a property between May and November 2024. K failed to complete the work and quality issues were identified. B claimed the payments were made as a result of an APP scam and requested a refund from Monzo. Monzo declined, stating it was a civil dispute. The ombudsman found that while B suffered a genuine loss, the evidence did not prove K obtained the funds through dishonest deception or that the funds were not used for the intended building purpose. The complaint was not upheld as the payments did not meet the definition of an APP scam under the applicable regulations and codes.

The Ombudsman's reasoning

The ombudsman applied the legal test for APP scams: whether the purpose B had for making payments and K had for obtaining them were broadly aligned, and if not, whether this resulted from dishonest deception. The evidence showed payments went to the intended recipient (K), substantial work was completed, and funds appeared to be used for building purposes. While there was mismanagement, underpricing, and quality issues, these do not constitute an APP scam. The CRM Code and Reimbursement Rules explicitly exclude private civil disputes between customers and legitimate suppliers. Even if Monzo had intervened, the information available at the time suggested K was legitimate, so intervention would not have prevented the loss.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website