DRN-6283501

The complaint Mr K is unhappy that Barclays Bank UK PLC (“Barclays”) won’t refund him money, which he believes he lost to a scam. What happened The background to this complaint is well known to all parties. So, I won’t repeat it all in detail here but in summary I understand it to be as follows. In or around February 2025, through a well-known online property portal, Mr K came across a website advertising properties for sale by auction. I will refer to the auctioneers as “D”. Mr K then placed bids on three properties auctioned by “D” which were successful. Following the successful bids, Mr K was required to pay £7,500 for each of the properties, which represented a deposit and a buyers administration fee. On 19 February 2025, Mr K made two payments from the account he holds with Barclays, each for £7,500, to cover two of the properties, with the remaining payment being made from an account he held with another provider. The payments were made to account details provided by the seller, who I’ll call “B”. However, Mr K has said he was subsequently presented with demands for further money, for each of the properties, which was beyond what he understood he was required to pay. He’s said these additional amounts/demands were not clearly disclosed in the legal packs or the promotional material that he saw. Mr K ultimately decided not to proceed with the purchases. He concluded he had fallen victim to a scam and reported the matter to his banks. Barclays declined to reimburse him. In summary, this was because it considered the matter to be a civil dispute between him and the company he paid, B. Unhappy with that response, Mr K referred his complaint to this service. He maintained that he’d been the victim of a scam and said that his other provider had refunded him the full amount that he had sent from them. One of our Investigator’s looked into things but didn’t uphold the complaint. In summary, it was our Investigator’s view that Barclays wasn’t unfair in rejecting Mr K’s claim. Mr K didn’t agree with our Investigator’s view. In summary; - Mr K believes payments were induced through misleading representations. - He added that after the deposits were paid he was presented with further substantial demands exceeding £15,000 per property – and these demands were not disclosed in the original documentation. - The legal pack created a strong impression that a regulated law firm was involved in the transaction. - There was a discrepancy between the name of the seller on the sales memorandum and the name of the company to which the payments were made.

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- Mr K said his other banking provider had provided a refund, which he considered to be relevant when considering whether deception had been involved. - Mr K believes B were operating a bait and switch fraud. As agreement couldn’t be reached, the complaint has been passed to me for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. In his submissions and in his response to our Investigator’s view, Mr K has provided some detailed arguments, as to why he thinks what has happened is a scam and why he thinks Barclays is liable to reimburse him the money he lost. I won’t be responding in kind, and I won’t necessarily go through every single point on a strict point-by-point basis. I’m aware that I’ve summarised this complaint briefly, in less detail than has been provided, and in my own words. No discourtesy is intended by this. Instead, I’ve focussed on what I think is the heart of the matter here. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it. I haven’t. I’m satisfied I don’t need to comment on every individual point or argument to be able to reach what I think is the right outcome. Our rules allow me to do this. This simply reflects the informal nature of our service as a free alternative to the courts. On bringing his complaint to this service, I’m mindful Mr K has referenced that another of his banking providers refunded him the money he had sent to B from them. But I would point out that each complaint is determined by its own individual circumstances. I can’t comment on the action another provider may have taken. Here, as I’m required to do, I’m only looking at the individual circumstances of Mr K’s complaint about Barclays. When considering what is fair and reasonable in this case, I’ve thought about the relevant rules that were in place at the time these disputed payments were made. From 7 October 2024, Payment Services Providers in the UK, like Barclays, have been bound by the Faster Payments Scheme (FPS) and the CHAPS reimbursement rules (“Reimbursement Rules”). Under these rules, most victims of Authorised Push Payment (APP) scams should be reimbursed – but “private civil disputes” are not covered. I’ve therefore considered whether what has happened between Mr K and B meets the Reimbursement Rules’ definition of an APP scam or could more reasonably be classed as a civil dispute. The Reimbursement Rules define an APP Scam as: “Where a person uses a fraudulent or dishonest act or course of conduct to manipulate, deceive or persuade a consumer into transferring funds from the consumer’s relevant account to a relevant account not controlled by the consumer, where: • The recipient is not who the consumer intended to pay, or • The payment is not for the purpose the consumer intended” By contrast, a private civil dispute is defined as; “A dispute between a consumer and payee which is a private matter between them for resolution in the civil courts, rather than involving criminal fraud or dishonesty”. In its published policy statement PS23/3, the Payment Systems Regulator gave further guidance:

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“2.6 Civil disputes do not meet our definition of an APP fraud as the customer has not been deceived […] The law protects consumer rights when purchasing goods and services, including through the Consumer Rights Act.” 2.5 provides an example of when this might apply: “…such as where a customer has paid a legitimate supplier for goods or services but has not received them, they are defective in some way, or the customer is otherwise dissatisfied with the supplier.” So, in order to consider what has happened here as an APP scam, I would need to be satisfied that it involves criminal deception. The evidence for this would therefore need to be convincing. Having thought about this carefully, I’m not satisfied that Mr K’s payments are covered by the Reimbursement Rules. The threshold for establishing fraud is a high one. In criminal proceedings, the standard of proof is “beyond reasonable doubt”, but this service assesses cases using the civil standard of proof, which is based on the balance of probabilities. Under this standard, a finding of fraud must be more likely than not. Even so, the bar remains high. It is not enough for fraud to be a compelling or persuasive explanation, nor is it sufficient for it to be the most likely among several possible explanations. It must be more probable than the opposite conclusion — i.e., that fraud did not occur. I’m mindful Mr K has also raised concerns about how the auctioneers, D, were operating. However, Mr K has paid B, so my focus here is whether the recipient of the funds defrauded him. I’m satisfied Mr K paid the company he intended on paying, so the first part of the APP scam definition doesn’t apply here. Mr K has said that the company he paid, B, didn’t match the name on a sales memorandum he was provided with. However, it is not unusual for limited companies to use other ‘trading names’ and I note from the screenshots Mr K has provided of the payment links he was given, it seems clear he was paying B. As the first part of the APP scam definition doesn’t apply here, I’ve gone on to consider whether, as a result of dishonesty, the payments were made for a purpose other than Mr K intended. In order to be satisfied Mr K has fallen victim to an APP scam, I need to be persuaded B set out to defraud Mr K. Here, the purpose of the payments was for the purchase of properties. While I appreciate that Mr K ultimately hasn’t taken ownership of the properties he intended to buy, it doesn’t automatically follow that B set out with the intent to defraud him. At the time the payments were made, B was registered on Companies House, and it seems to have been established for many years prior to Mr K making the payments, with evidence of it filing accounts. It also appears to still be trading, albeit under a different name. Which further supports that B was a legitimate firm whose nature of business matched the purpose of the payments (the buying and selling of own real estate). I’m mindful Mr K has said B changed names frequently to mask its background – but I don’t agree that a company changing its name automatically means it is operating fraudulently, there are many legitimate reasons why a company may do this. Mr K believes that B engaged in a “bait-and-switch” fraud: he began the process believing he understood the costs, however, at a later stage, he’s said he was presented with further substantial demands. The difficulty is that these charges were all provided for in the contract Mr K entered into with B. For example:

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8.5 The Buyer will be responsible for the sellers fee and expenses of Nine Thousand Nine Hundred & Ninety Five Pounds and such fee is payable on completion. No breakdown or invoice will be provided by the seller and no requisition can be raised. If full funds are not received completion shall not take place. 8.6 The Buyer shall pay to the seller an additional 100% of the purchase price paid at auction (the hammer price) as the sellers costs. This payment is in addition to the other costs due under the contract. No invoice or breakdown will be provided and completion will not take place until all costs are paid in full including the costs under this clause. 8.7 The Buyer shall be responsible to pay the sellers solicitors fees of £1500 plus vat and such fee is payable on completion. No breakdown or invoice will be provided by the seller and no requisition can be raised. If full funds are not received completion shall not take place. I don’t doubt that the contract appears one‑sided and disproportionately favours the seller. Writing terms like these into a contract might be considered sharp practice, underhand, or unethical. However, that is not the same as acting fraudulently. Mr K has argued that the contracts detailing these ‘special conditions’ were received after he’d made his payments. However, I note from the sales memorandum, which I understand Mr K received before making the payments, referenced theses ‘Conditions of Sales and Special Conditions’. So, while, I think B could have been more proactive in providing these documents to Mr K, I think Mr K would have had the opportunity to have asked for them and reviewed them or sought legal advice before proceeding. As well as this, whilst I can’t go into specific details due to data protection reasons, information I’ve seen from the beneficiary bank (the bank to which the payments were made) supports that B didn’t have a different intention for the money that was received. The beneficiary bank didn’t raise any concern with how the account was being run. Typically, if somebody were running a fraud, you’d expect to see concerns – but that isn’t the case here. I have also considered the negative reviews Mr K has shared about B and information regarding individuals associated with it. However, it is difficult to reach a finding based solely on these that B was acting fraudulently. And, as far as I am aware, despite what Mr K has shared, this has not resulted in any substantive investigation by the authorities into B. That is not determinative, but it is instructive and I can’t ignore it. It makes it more difficult to reach the conclusion Mr K is asking me to reach. Mr K has also pointed to a conviction against somebody associated with B. However, this appears to be in respect of an unrelated matter and although this may lend weight to the individual being of bad character, I don’t think a previous conviction, particularly one that is not linked to the circumstances of the complaint Mr K has raised, means that future business carried out by B is necessarily a scam. A business may act unprofessionally but can still be carrying out legitimate business. I appreciate Mr K feels B has made misleading representations. But this more closely represents Mr K questioning elements of the contract, specifically the additional fees, that he entered into with B, something that is excluded from the definition of a scam in the Reimbursement Rules. The misrepresentation he mentions, may mean Mr K could make a claim against B under consumer protection legislation, but any such claim wouldn’t be the responsibility of Barclays.

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I want to be clear that I am not ruling out the possibility that Mr K has been the victim of fraud here. But based on the evidence available, I can’t safely say that fraud is the most probable explanation, over any other, as to why things have gone wrong. I don’t intend any comments or findings I’ve made in this decision to downplay or diminish the impact these matters have had on Mr K. I know this will be a huge disappointment to him and I appreciate how strongly he feels about this case. But for the reasons I’ve explained above, I do not consider that it was unreasonable for Barclays to decline Mr K’s claim when considering the Reimbursement Rules, and I find no other reasons upon which it would be fair to ask Barclays to refund Mr K the money he lost. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr K to accept or reject my decision before 26 May 2026. Stephen Wise Ombudsman

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