Lloyds Bank PLC · DRN-6241972

The complaint Mr P complains that Lloyds Bank PLC (“Lloyds”) won’t reimburse money he says he lost to fraud. What happened The background to this complaint is well known to all parties and has been laid out in detail by our Investigator in their view, so I won’t repeat it all in detail here. But, in summary, I understand it to be as follows. On 21 October 2025, Mr P made a payment of £2,415.44, from his Lloyds account, to a company I’ll call “Company I”. Mr P was making the payment for the purchase and installation of sliding doors. But the doors were neither delivered nor installed, with Company I subsequently going into administration. Believing he’d been the victim of a scam, Mr P contacted Lloyds. It looked into his complaint but didn’t uphold it. In summary, it considered what had happened to be a civil matter. Unhappy with Lloyds’ response, Mr P brought his complaint to this service. One of our Investigators looked into things, but he didn’t think the complaint should be upheld. In summary, our Investigator didn’t agree that the evidence supported that the payment was made in connection with a scam. So, he didn’t think Lloyds were liable to refund Mr P. Mr P disagreed with the Investigator’s findings. In summary, he said the administrators had told him that the doors had never been manufactured, but Company I had told him that they had been ordered. He added that Company I misled him and lied and made him pay money into a company account, which didn’t match the name of the company on the website from which the order was made. 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. When considering what is fair and reasonable in this case, I’ve thought about the relevant rules that were in place at the time this disputed payment was made. From 7 October 2024, Payment Services Providers in the UK, like Lloyds, 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 P and Company I 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:

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“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: “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 P’s payment is 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. There is no dispute here that Mr P paid the company he intended on paying, so the first part of the APP scam definition doesn’t apply here. I’m mindful that Mr P has said that the company he paid, Company I, didn’t match the website he’d ordered from. However, it is not unusual for limited companies to use other ‘trading names’ and I note from the contract Mr P has shared that it is quite clear that Company I is shown as the company, but just ‘trading as’ a different name. 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 payment was made for a purpose other than Mr P intended. In order to be satisfied Mr P has fallen victim to an APP scam, I need to be persuaded Company I set out to defraud Mr P. Here, the purpose of the payment was to provide and install sliding doors. While I appreciate that Mr P didn’t receive what he had paid for, it doesn’t automatically follow that Company I set out with the intent to defraud Mr P. At the time the payment was made, Company I was registered on Companies House and it seems to have been established for many years prior to Mr P making the payment, with

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evidence of it filing accounts. Which further supports that Company I was a legitimate firm providing a service. Mr P has also confirmed that he’d seen positive reviews about Company I’s work, which supports the theory that Company I had successfully completed work for others previously. While this doesn’t of course rule out the possibility that a fraud has taken place, it equally supports the notion that Company I didn’t deceive Mr P about the very purpose of the payment. 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 faster payment was made) supports that Company I 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. Company I also seems to have followed the formal administration process, which is what you would expect to see from a legitimate business. All of which suggests that, rather than setting out with an intent to defraud, Company I was a genuine firm that ceased trading and was therefore unable to meet the commitments it had made. Mr P has said that the doors weren’t manufactured, but I’m not persuaded this, in and of itself is enough to say that Company I defrauded Mr P. Sadly, it is true that many companies experience difficulties and attempt to trade through those difficulties. But there are many other plausible explanations as to why a business may fail, that do not involve fraud. They may be poorly managed, be run unprofessionally or simply not generate enough trade. In the circumstances of what has happened here, I am not satisfied that it meets the high threshold required to conclude that fraud occurred. With 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 P. I have a great deal of sympathy for him; I don’t doubt that he has been let down and that he has a genuine grievance against Company I. But in the circumstances, having carefully considered everything, I don’t find Lloyds were wrong to decline Mr P’s claim when considering the Reimbursement Rules. Neither do I find there were any other failings on Lloyds’ part that would lead me to uphold this complaint. 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 P to accept or reject my decision before 25 May 2026. Stephen Wise Ombudsman

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