Not upheld: scam reimbursement / authorised push payment (APP) scam claim complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr S complained that Barclays should reimburse him for payments made to company P for art investments that he now believes were a scam. The ombudsman considered whether this constituted an authorised push payment (APP) scam under the Contingent Reimbursement Model Code, but found that card payments fall outside the CRM Code's scope. The ombudsman concluded that Mr S had not provided sufficient evidence to prove that P dishonestly deceived him about the purpose of the payments; instead, the evidence suggested P was an established legitimate company that delivered the artworks as promised. The ombudsman also found that Barclays could not have identified cause for concern at the time of the transactions and that Mr S failed to report the matter within relevant timescales for recovery. The complaint was not upheld.

The Ombudsman's reasoning

To establish a scam, it must be shown that the recipient's purpose in procuring the payments differed from Mr S's purpose, arising from dishonesty or deception. The key issue is the recipient's intentions at the time payments were made. Mr S provided insufficient evidence that his funds were not used to purchase the art or that the artwork was lost. The existence of the artworks, confirmed by storage audits and other investors receiving prints, suggests P fulfilled its stated purpose. Dubious business practices and inflated markups do not prove fraudulent intent. The court case only established that fraud was arguable, not proven. Barclays could not have identified cause for concern at the time of payment, and Mr S failed to report the scam within relevant timescales for recovery attempts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website