Santander UK Plc · DRN-5911117

The complaint Mr E complains that Santander UK Plc (“Santander”) won’t refund him money, which he believes he has lost to an Authorised Push Payment (“APP”) scam. What happened The background to this complaint is well known to all parties, so I won’t repeat it in detail here. But in summary, I understand it to be as follows. In or around February 2025, Mr E was looking for a company that provided HGV driving lessons. He’d previously used a company, who I’ll refer to as “H”, for theory lessons and had received the service he’d paid for. So, he decided to also use H for the driving lessons. On 24 February 2025, Mr E paid £1,200 to H from the account he holds with Santander. But he’s said he never received the lessons. Mr E said he tried to contact H and visited its premises but was told that D had gone into liquidation. Believing he’d fallen victim to a scam, Mr E raised the matter with Santander, but it did not consider it was liable for Mr E’s loss. In summary, this was because it thought what had happened was a civil matter. Unhappy with Santander’s response, Mr E brought his complaint to this service. One of our Investigators looked into things. But they agreed with Santander, that this was most likely a civil dispute, and so Mr E was not entitled to a refund of the payment he had made. Mr E didn’t agree with our Investigator’s view. 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. Having done so and having thought very carefully about Santander’s actions, I agree with the findings set out by our Investigator. I do appreciate how disappointing this will be for Mr E but, whilst I’m sorry to hear of what’s happened, I don’t think I can fairly hold Santander liable for his loss. 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 Santander, 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.

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I’ve therefore considered whether what has happened between Mr E and H 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: “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. Mr E paid H and I’ve seen nothing to suggest that this was not who he intended to pay. So, Mr E cannot be said to have paid a recipient he did not intend to pay, as per the definition above. The allegation of fraud is a serious one. While I can reach my findings on the balance of probabilities (rather than beyond all reasonable doubt for example), to find H did intend to defraud Mr E, I’d need to see convincing evidence to show fraud is the most likely explanation over any other possibility. Here, the purpose of the payment was for Mr E to receive HGV driving lessons. While I appreciate that Mr E hasn’t received this service, it doesn’t automatically follow that H set out with the intent to defraud him. Mr E has said he had successfully used H’s services previously. Which indicates that H has provided services satisfactorily before. This supports the theory that H’s intention was to provide services that they received payment for. As well as this, at the time the payments were made, H was registered on Companies House, with the nature of its business being ‘Driving school activities’. Which further supports that H was a legitimate firm providing a service that is in line with what the purpose of Mr E’s payment was intended for. I’m mindful H has since dissolved, but it doesn’t automatically follow that because a company has ceased to trade that it has acted

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fraudulently – there are many, genuine and legitimate, reasons why a company will dissolve that don’t involve fraud. Alongside 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 H didn’t have a different intention for the money that was received. The beneficiary bank was satisfied that the account was being run legitimately and from what I’ve seen of the activity on the account, it was consistent with what you would expect from a company of this nature. I acknowledge that Mr E did not ultimately receive all that he had paid for, but there are many reasons, other than fraud, why a company may fail to meet their commitments. They may act unprofessionally or may get into financial difficulty and services may be completed to a poor standard or not provided at all. But it doesn’t automatically follow that this demonstrates an intent to defraud. I’m also mindful that Mr E had used H’s services previously, and was seemingly satisfied, given he approached H to use their services again. All of this lends itself to the notion that H was a legitimate company which had provided services for Mr E previously, seemingly without issue. But which seems to have fallen on hard times and entered into liquidation. A scenario that isn’t covered by the Reimbursement Rules. I know this will be a huge disappointment to Mr E, 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 Santander to decline Mr E’s claim when considering the Reimbursement Rules, and I find no other reasons upon which it would be fair to ask Santander to refund Mr E 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 E to accept or reject my decision before 14 April 2026. Stephen Wise Ombudsman

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