DRN-5985978

The complaint Mr S complains that Santander UK Plc won’t refund the money he says he lost to a scam. What happened Mr S made payments to a lettings agency (which I will call P) from his Santander account over a period of around seven months. In total Mr S paid £7,800 to P for rent on the property that he was living at. But in March 2025 Mr S received an eviction notice, and was told that the property was being repossessed as the landlords (Mr and Mrs C) had not been paying the mortgage. Mr S believes that Mr and Mrs C, and P, knowingly took rental payments from him when they were aware that the property was due to be repossessed. He says he has seen evidence that Mr C has been subject to criminal proceedings relating to fraud. Mr S considers that his circumstances meet the definition of an Authorised Push Payment (APP) scam, and that the funds he sent to P should therefore be refunded to him by Santander. Santander looked into what had happened, but said Mr S wasn’t eligible for a refund as it said this was a private civil dispute between Mr S and P. Unhappy with Santander’s response, Mr S brought his complaint to this service and one of our investigators looked into things. But they agreed with Santander that this was most likely a civil dispute, and so Mr S was not entitled to a refund of the payments he had made. Mr S remained unhappy, he maintains that he has been the victim of a scam. As the case could not be resolved informally, it’s been passed to me for a 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 S but, whilst I’m sorry to hear of what’s happened, I don’t think I can fairly hold Santander liable for the loss he is claiming. I’m aware I’ve summarised this complaint and the relevant submissions briefly, in much less detail than has been provided, and in my own words. No discourtesy is intended by this. In this decision, I’ve focussed on what I think is the heart of the matter here. Therefore, 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 consider is the right outcome. Our rules allow me to do this, reflecting the informal nature of the Financial Ombudsman as a free alternative to the courts.

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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 payments were made. Prior to 7 October 2024 this was the Contingent Reimbursement Model Code (the CRM Code). Under the CRM Code, the starting principle was that a firm should reimburse a customer who is the victim of an APP scam. But the CRM Code only applies in very specific circumstances – where the customer has been the victim of an APP scam. Under the CRM Code, an APP scam is defined as: “…a transfer of funds…where (i) The Customer intended to transfer funds to another person, but was instead deceived into transferring the funds to a different person; or (ii) The customer transferred funds to another person for what they believed were legitimate purposes but which were in fact fraudulent.” The CRM Code is also quite explicit that it doesn’t apply to all push payments. It says: “DS2(2) This code does not apply to: (b) private civil disputes, such as where a Customer has paid a legitimate supplier for goods, services, or digital content but has not received them, they are defective in some way, or the Customer is otherwise dissatisfied with the supplier.” Fraudulent isn’t defined in the CRM Code, but as the CRM Code specifically excludes civil disputes, I think I need to consider, as a first step, whether this was a scam (where a scammer takes money from a customer for no legitimate purpose) or a civil dispute (where a payment is made to a legitimate trading company or business, but there is some dispute about the goods or services that should have been supplied). From 7 October 2024 onwards, Payment Services Providers in the UK, like Santander, have been bound by the Faster Payments Scheme (FPS) and the CHAPS reimbursement rules. Under these rules, most victims of APP scams should be reimbursed – but again “private civil disputes” are not covered. I’ve therefore also considered whether what has happened to Mr S 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”. 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. If this was a scam, or fraud – then banks (including Santander) must follow industry and regulatory guidance, including the CRM Code and the Reimbursement Rules, to check

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certain payments, take steps to protect customers, and to refund payments where the relevant rules say they are liable. But where payments are made to a legitimate business for a legitimate reason, then such principles don’t apply. This is then classed as a civil dispute, and for which banks normally have no liability. Mr S paid P, and I’ve seen nothing to suggest that he was not who Mr S intended to pay. So, Mr S cannot be said to have paid a recipient he did not intend to pay, as per the definitions above. Mr S’s purpose for the payments was to secure a tenancy on a property, and it appears that Mr S did live in the property during the time covered by those payments, and for some time afterwards. And securing a tenancy does not mean that you are automatically protected from any future issues regarding the ownership of that property. So, while it is clear that there is an issue here regarding Mr S’s eviction, and the repossession of the property, at heart Mr S did get what he had paid for. His purpose for the payments and P’s purpose for the payments were aligned. Mr S paid to rent the property, P facilitated the rental of that property to him, and Mr S lived at the property. In addition, having thought very carefully about all that Mr S 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 P (or Mr and Mrs C) set out with any intent to defraud him, or did not intend to fulfil the purpose they had agreed with Mr S. I say this for the following reasons: - Mr S has said that the property was due for repossession as early as July 2024 (when he started to pay rent) but has provided no clear evidence to support this. - Mr S has said that Mr C was subject to criminal proceedings regarding mortgage fraud, but we have been provided with no evidence of this. And, in any case, Mr S has said these proceedings do not relate to the property he was living in, so they would not be evidence of fraudulent intent regarding the payments in dispute here. - I have seen no evidence to show that P (which is who Mr S paid) was aware of any issues regarding the mortgage on the property not being paid. It passed Mr S’s funds on to the property owner, as one would expect from a legitimate lettings agency. - P was an established lettings agency, which by all accounts appears to have operated successfully for many years. I am satisfied it was a legitimate business. I acknowledge that the property Mr S lived at was ultimately repossessed, but that does not constitute any kind of proof that P acted fraudulently here or knowingly misled Mr S about the payments he was making. And this service isn’t in a position to forensically analyse P or the property owner’s actions here; our role is not to investigate the actions of P or the property owner, it is to decide whether Santander treated Mr S fairly. And in doing so we must consider the evidence that is before us. And I’ve not seen persuasive evidence at this time to show that P (or Mr and Mrs C) set out to defraud Mr S. I know this will be disappointing to Mr S. 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 S’s claim under the relevant reimbursement rules. My final decision I do not uphold this complaint.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 14 May 2026. Sophie Mitchell Ombudsman

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