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

Decision detail

Summary

Mrs J complained to Starling Bank that she had been scammed after paying approximately £31,000 for home renovation works to a firm called O between June and September 2025. She alleged that O misrepresented itself, made her home uninhabitable to create dependency, and increased costs without justification. Starling declined to reimburse her, considering it a civil matter. The ombudsman found that the complaint did not meet the definition of an Authorised Push Payment scam under the Faster Payments Scheme reimbursement rules because Mrs J knew the identity of the account holders when making payments and there was insufficient evidence that O intended to defraud her from the outset. The ombudsman noted that while there were concerning elements such as cost increases and communication issues, evidence of O's legitimate business status, positive reviews, and account use consistent with a building firm meant that fraud was not more probable than other explanations such as project breakdown or incompetence. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the definition of an Authorised Push Payment (APP) scam under the Faster Payments Scheme reimbursement rules, which requires evidence that the recipient was not who the consumer intended to pay or the payment was not for the purpose intended. The ombudsman found that Mrs J knew the identity of the account holders when making payments, so the first criterion was not met. Regarding the second criterion, while Mrs J felt the agreement was misrepresented, the ombudsman found insufficient evidence that O never intended to fulfil its agreement or obtained funds through criminal deception. The ombudsman applied the civil standard of proof (balance of probabilities) but found that fraud must still be 'more likely than not' to be established. The evidence of O's Companies House registration, positive reviews, account use consistent with a building firm, and the possibility of project breakdown or incompetence meant the evidence did not meet the threshold of being more probable than not that fraud occurred. The ombudsman concluded this was more likely a civil dispute than a criminal scam.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website