Not upheld: Fraud reimbursement (APP scams) complaint against HSBC UK Bank Plc

Decision detail

Summary

Mr H purchased a vehicle from an online auction company C, making an initial payment of £2,430 via faster payment from his HSBC account. When C demanded additional fees for VAT and other charges, Mr H refused to pay and was unable to collect the vehicle. Mr H requested HSBC refund the payment, claiming he had been scammed. HSBC declined, treating the matter as a civil dispute. The ombudsman upheld HSBC's decision, finding that while the auction company's practices were potentially unethical and customer reviews were overwhelmingly negative, the evidence did not support that C intended to defraud Mr H. The dispute over payment of fees detailed in publicly available terms and conditions constituted a private civil matter rather than an APP scam covered by the Reimbursement Rules.

The Ombudsman's reasoning

The ombudsman applied the Reimbursement Rules definition of an APP scam, which requires evidence of fraudulent or dishonest conduct with intent to deceive. While Mr H did not receive the vehicle, this does not automatically prove criminal intent. The ombudsman found that C's actions—retaining the vehicle pending full payment and issuing fees detailed in publicly available terms and conditions—were consistent with contractual enforcement rather than fraud. The existence of some positive customer reviews and the beneficiary bank's lack of concerns about the account further supported the conclusion that this was a private civil dispute over payment terms rather than a scam. The ombudsman concluded that HSBC was not unreasonable in declining the refund claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website