Upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc
Financial Ombudsman decision DRN-6405512 of 2026-06-16T00:00:00+00:00. Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc. Outcome: Upheld.
Decision detail
| Reference | DRN-6405512 |
|---|---|
| Decision date | 2026-06-16T00:00:00+00:00 |
| Firm | HSBC UK Bank Plc |
| Product | Investment |
| Claim type | Fraud reimbursement (APP scams) |
| Outcome | Upheld |
| Remedy | Refund of £30,000 plus simple interest calculated using the time-weighted average of the Bank of England base rate plus one percentage point from the date HSBC declined the claim to the date of settlement. HSBC is entitled to take an assignment of rights to future distributions from the administrative process before paying the award. |
Summary
Mr B invested £30,000 with company D in February 2021, believing it was a legitimate property investment offering 20% annual returns. He met the company's directors, received professional documentation, and was added to a messaging group with other investors. When D went into liquidation, Mr B received no funds back and claimed fraud with HSBC, which declined the claim stating it was a genuine investment that failed. The ombudsman upheld the complaint, finding the payments met the definition of an Authorised Push Payment (APP) scam under the CRM Code because D was not operating legitimately at the time and had diverted funds to a forex scheme and used investor money to repay previous investors, contrary to the stated purpose. HSBC was required to refund Mr B £30,000 plus interest, as no exceptions to reimbursement under the CRM Code applied.
The Ombudsman's reasoning
The ombudsman applied the CRM Code definition of an APP scam, which requires that a customer transferred funds believing the purpose was legitimate, but the recipient had a fraudulent purpose. The ombudsman found that while Mr B had a reasonable basis for believing the investment was legitimate based on available evidence (meeting directors, professional documentation, investor group confirmation), D was not operating legitimately at the time of the payments. Evidence showed D was diverting funds to a forex scam and using investor money to repay previous investors, not for the stated property investment purpose. Therefore, the payments met the APP scam definition. The ombudsman rejected both exceptions to reimbursement: Mr B had a reasonable basis for belief in the investment's legitimacy, and the warning provided by HSBC was not effective in his circumstances because D appeared to be a genuine company and further research would not have revealed the fraud.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| HSBC UK Bank Plc, all decisions | 7,578 | 23% |
| Fraud reimbursement (APP scams), all decisions | 20,976 | 21% |
| Investment, all decisions | 14,180 | 34% |
Source
Read the original decision on the Financial Ombudsman Service website