Upheld: Authorised Push Payment (APP) Scam - Failure to reimburse under CRM Code; Fraudulent investment scheme complaint against Starling Bank Limited
Financial Ombudsman decision DRN-6387289 of 2026-06-05T00:00:00+00:00. Authorised Push Payment (APP) Scam - Failure to reimburse under CRM Code; Fraudulent investment scheme complaint against Starling Bank Limited. Outcome: Upheld.
Decision detail
| Reference | DRN-6387289 |
|---|---|
| Decision date | 2026-06-05T00:00:00+00:00 |
| Firm | Starling Bank Limited |
| Product | Investment |
| Claim type | Authorised Push Payment (APP) Scam - Failure to reimburse under CRM Code; Fraudulent investment scheme |
| Outcome | Upheld |
| Remedy | Starling Bank Limited directed to pay Ms J within 28 days of her acceptance of the final decision: (1) £100,000 (the amount lost through the payments to the scam); plus (2) interest at 8% simple per annum calculated from 17 December 2025 until the date of settlement (less any tax properly deductible). Starling may require Ms J to provide an undertaking to assign to the bank any rights to monies recoverable elsewhere from her investment in Company P, with payment potentially conditional on provision of such undertaking. |
Summary
Ms J invested £100,000 with Company P through her Starling Bank account in May 2021 in a property development mini-bond scheme. Company P entered administration less than a year later, and Ms J lost her entire investment. When Ms J reported the matter to Starling as an APP scam in April 2023, the bank refused reimbursement, claiming it was a private civil dispute rather than a scam. The ombudsman found on the balance of probabilities that Company P operated a fraudulent investment scheme from the outset, involving misrepresentations about its control (concealing the involvement of Person J, who had links to previous fraudulent schemes), false claims about investor protections, hidden fees, and representations about repayment made when the company was known to be insolvent. The ombudsman upheld Ms J's complaint and directed Starling to reimburse her £100,000 plus 8% interest from 17 December 2025, finding that none of the CRM Code exceptions to reimbursement applied.
The Ombudsman's reasoning
The ombudsman found on the balance of probabilities that Company P operated a fraudulent investment scheme from the outset, designed to deceive investors. Key misrepresentations included: (1) concealment of the true controlling mind (Person J, with links to previous fraudulent schemes) behind a de jure director; (2) false claims about a first charge and £1.15m 'Investor Protection Buffer' that did not exist as represented; (3) hidden commission payments and fees totalling at least £140,000 that were not disclosed to investors; and (4) representations about repayment prospects when Company P's controllers knew the company was insolvent or nearing insolvency. The scheme operated as a Ponzi scheme, with property purchases and development work undertaken to maintain the appearance of legitimacy and encourage reinvestment. The ombudsman rejected arguments that the lack of absolute certainty, absence of criminal prosecution, or the high-risk nature of the investment should prevent reimbursement. The CRM Code requires reimbursement on the balance of probabilities, not the criminal standard of proof. None of the exceptions to reimbursement (effective warning, reasonable basis for belief, or gross negligence) applied to Ms J.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Starling Bank Limited, all decisions | 981 | 25% |
| Investment, all decisions | 13,970 | 35% |
Source
Read the original decision on the Financial Ombudsman Service website