Starling Bank Limited · DRN-6039315

The complaint Mr O complains that Starling Bank Limited (“Starling”) won’t refund him money, which he believes he has 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 September 2025, Mr O was looking to book a holiday with some friends. A friend of Mr O’s, who I’ll call ‘G’, said that he’d arranged group bookings before and offered to arrange the trip – G was also planning to travel with the group. Shortly after, G sent Mr O a booking confirmation for the holiday, which was from a well- known online travel agency. On 1 September 2025, Mr O sent G £2,000 from his Starling account toward the holiday. Which was his own money, as well as money he had collected from other friends who were part of the group planning to go on the holiday. But Mr O has said G subsequently blocked him and other friends and the holiday was cancelled, seemingly without G forwarding the money on to the travel agency. The trip didn’t go ahead, and Mr O hasn’t received his money back. Believing G had scammed him, Mr O raised the matter with Starling, but it did not consider it was liable for Mr O’s loss. In summary, this was because it thought what had happened was a civil matter. Unhappy with Starling’s response, Mr O brought his complaint to this service. One of our Investigators looked into things. But they agreed with Starling that this was most likely a civil dispute, and therefore considered Mr O was not entitled to a refund of the payment he had made. Mr O didn’t agree with our Investigator’s view, in summary he maintained that he’d been scammed. 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 Starling’s actions, I agree with the findings set out by our Investigator. I do appreciate how disappointing this will be for Mr O and whilst I’m sorry to hear of what’s happened, I don’t think I can fairly hold Starling 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 the disputed payment was made. From 7 October 2024, Payment Services Providers in the UK, like Starling, have been bound by the Faster Payments Scheme (FPS) and the CHAPS reimbursement rules (“Reimbursement Rules”).

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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 O and A meets the Reimbursement Rules’ definition of an APP scam or could more reasonably be classed as a civil dispute. The 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. Having thought about this carefully, I’m not satisfied that the Reimbursement Rules cover Mr O’s payment. I’ll explain why. There is no dispute here that Mr O paid the person he intended on paying so the first part of the APP scam definition doesn’t apply here. I’ve therefore gone on to consider whether, as a result of dishonesty, these payments were made for a purpose other than Mr O intended. The threshold for establishing fraud is a high one. Although this service applies the civil standard of proof (meaning I must decide what is more likely than not) a finding of fraud cannot be found lightly. It is not enough that fraud is a possible or even persuasive explanation, nor that it is the most likely of several explanations. I’d need to see convincing evidence to show fraud is the most likely explanation over any other possibility. It must be more probable than the alternative conclusion: that no fraud occurred. Simply failing to provide an item or service that has been paid for won’t be enough to show that what happened was an APP scam. That’s because the key issue is whether G’s intention at the time of the payments was to defraud Mr O, and any other reasons for the holiday not being delivered might not mean that was always what had been intended.

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In this case, in my view, that means the evidence must support a finding that G deceived Mr O into taking money for a holiday, that G had no intention of providing at the time the payment was made. Such a finding would essentially be one of criminal wrongdoing. That’s not a finding that should be made lightly. The evidence Mr O has for such a finding is quite limited and largely relies on some suggestions of bad character and misrepresentation. I haven’t seen sufficient compelling evidence to support that a fraud has taken place here. I’ll explain why. Mr O has said that he’d known G for a number of years and was friends with them, although not close friends. Mr O has said he had also sent money to G previously, which was for small personal transfers (for such things as shared expenses, food). In my experience being friends and known to somebody is not typical behaviour for a fraudster – most notably because I think it’s likely a criminal wouldn’t want their identity to be so obvious, given they are committing a crime. While this, of course, doesn’t rule out the possibility that G could later go on to commit a fraud against Mr O, it also lends itself to the notion that there may have been an alternative explanation for why things haven’t worked out as they ought to have done. In the circumstances of this case, it appears G did provide Mr O with a booking confirmation for the holiday – before the holiday was cancelled with no payments being made towards it. Mr O believes that the booking confirmation was used to induce him to release the funds and that G blocked him soon after he sent them money. I accept these behaviours can be hallmarks of a scam, but there are other possible reasons for them being present. Booking the holiday, which G did do here, at least equally indicates that they had an intent to fulfil what was promised, and I cannot rule out that there could be other plausible reasons for the money not subsequently being paid forward. In the individual circumstances of this case, there are also a number of other factors that aren’t typically seen in scams. Whilst I can’t go into specific details due to protection laws, information from the beneficiary bank (the bank to which the money was sent), doesn’t indicate that there were any concerns with how the account was being run and there had been no other reports of fraud. Typically, if somebody were running a fraud, you’d expect to see other concerns raised – but that isn’t the case here. I can’t know for sure what G’s intent was and I don’t have the power to compel evidence from G (unlike say the police). In the circumstances here I haven’t been provided with any evidence from any third-party organisation, like the police, to support Mr O’s claim that he is the victim of a scam. I’m afraid that only a police investigation may be able to establish criminal wrongdoing (or otherwise) on the part of G. Having thought very carefully about all that Mr O has said, and about the evidence provided by all parties to this complaint, I’m not persuaded that I can safely say with any certainty, based on what I know and what the evidence shows, that G set out with an intent to defraud Mr O. I know this will be a huge disappointment to Mr O, and I appreciate how strongly he feels about this case, he has been badly let down, and I don’t doubt that he has a grievance against G. But for the reasons I’ve explained above, I do not consider that it was unreasonable for Starling to decline Mr O’s claim under the relevant Reimbursement Rules. My final decision My final decision is that I don’t uphold this complaint.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr O to accept or reject my decision before 28 April 2026. Stephen Wise Ombudsman

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