HSBC UK Bank Plc · DRN-6246630

The complaint Mr P complains that HSBC UK Bank Plc (‘HSBC’) won’t reimburse the funds he lost when he fell victim to what he believes was a scam. What happened The background to this complaint is well known to both parties. So, I won’t repeat everything again in detail here, but in summary I understand it to be as follows: In August 2023 Mr P was introduced to a landscaper, who I’ll refer to as “R” who ran a landscaping business. R was working on Mr P’s next door neighbours’ garden at the time. Mr P was looking to start a project himself and had received quotes from other landscapers. He spoke to R about the renovation and landscaping of his front drive, front and back garden and patio. Mr P received an estimate of £19,150 for the project and was told R could start soon after he’d completed the job next door. Mr P thought the price was good and agreed to go ahead. The total price did increase slightly after the quote when Mr P was persuaded to have railway sleepers included too. Mr P made the following payments from his HSBC account to a personal bank account in the name of R. Payment Date Payment reference Payment Type Amount 1 12 September 2023 Garden Landscaping Faster payment £5,000 2 11 October 2023 Tree Surgeon Faster payment £1,100 3 18 October 2023 Digger Rental Faster payment £2,400 4 25 October 2023 Sleepers etc Faster payment £2,000 5 1 November 2023 Brick Layer Faster payment £400 6 7 November 2023 Landscaping Payment Faster payment £2,000 7 11 April 2024 Sand, cement etc Faster payment £500 8 19 April 2024 Digger waste removal Faster payment £400 9 19 May 2024 Materials Faster payment £875 10 28 May 2024 Turf slab drainage Faster payment £1,000 Total £15,675 Mr P estimates that R and/or his workers attended his property approximately 15-20 days between September 2023 and May 2024. R and his team did carry out some work, albeit only a fraction of what was expected, and the work provided wasn’t to a good standard. Mr P has also been left with a large heap of garden waste at the front of his house and has paid for materials that he hasn’t received. Soon after making the last payment to R he became uncontactable. Mr P sought advice from Solicitors and Citizens Advice and first reported the matter to HSBC in August 2024. HSBC

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told Mr P it thought it was civil dispute between Mr P and R and not a scam. Mr P continued to try and contact R, attempting to get his money back or get the work completed – unfortunately without success. Mr P attempted to raise the matter with HSBC again in March 2025 which led to Mr P making a complaint. HSBC issued a final response on 7 May 2025 and reiterated it felt that the matter was a civil dispute and not a scam and so wouldn’t reimburse him. Unhappy with the outcome, Mr P brought his complaint to our service. One of our Investigators looked into the complaint. The Investigator was persuaded that at the point of the first payment, the landscaper likely intended to carry out the agreed work. But after that, she felt R’s intentions changed and that Mr P was deceived into making further payments and therefore had been scammed. The Investigator considered that HSBC should refund payments two to ten under the provisions of the Contingent Reimbursement Model (“CRM”) Code – including interest. She also said HSBC should pay Mr P £100 compensation because it should have investigated Mr P’s claim more thoroughly before concluding that he hadn’t been the victim of a scam. HSBC didn’t agree with the outcome. In summary it felt that Mr P had received some value in materials and labour for the work that was carried out and the dispute was about the quality of the work. HSBC felt that for the later payments it could rely on one of the exceptions to reimbursement given in the CRM Code. Mr P didn’t confirm whether he agreed with the outcome or not. I sent Mr P and HSBC a provisional decision on 5 March 2026, setting out why I intend to not uphold the complaint. In my provisional decision I said the following: “Having considered everything carefully, I do not agree with the findings of our Investigator and I’m not upholding the complaint. I’ll explain why. First of all, I’m truly sorry that Mr P has lost out as a result of what’s happened here. I accept that he has paid a lot of money towards this project and has been left with an incomplete job and to a poor standard. I also know that what has happened has caused Mr P a lot of stress and upset too. But it’s my role to consider whether HSBC is responsible for his losses. I know it will be disappointing for Mr P, but I am not recommending that HSBC refund him here. In broad terms, the starting position at law is that a bank is expected to process payments and withdrawals that a customer authorises it to make, in accordance with the Payment Services Regulations (in this case the 2017 regulations) and the terms and conditions of the customer’s account. As Mr P authorised the payments, there are a limited number of circumstances in which HSBC would be liable to refund him, namely that he’s been the victim of an authorised push payment (‘APP’) scam. Our Investigator explained why she thought that after payment one, Mr P had been the victim of an APP scam and mostly relied on what the receiving bank statements show happened to the money Mr P sent R. But having carefully considered all of the evidence and information available to me, I have reached a different decision to our Investigator. I’ll explain why. The CRM Code HSBC was a signatory to the CRM Code. Under this code, the starting principle is that a firm should reimburse a customer who is the victim of an APP scam, except in limited

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circumstances. But the CRM Code only applies if the definition of an APP scam as set out in it, is met. The relevant part of the CRM Code definition of an APP scam requires that the payment was made to: ‘…another person for what they believed were legitimate purposes but which were in fact fraudulent.’ The CRM Code also explains that it does not apply to ‘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’. For there to be ‘fraudulent purposes’ (as opposed to legitimate purposes) it would require the test for fraud to be met in relation to the purposes for which the payment was procured. That must have been at the time the payment transaction occurred or earlier. I don’t have the power to speak to or conduct a criminal investigation into R or his business. But part of what is required here is to establish the intent and state of mind of the person accused of this fraud about the purpose of Mr P’s payments. When considering the evidence produced in support of Mr P’s claim of an APP scam, I’m required to reach my findings on a balance of probabilities rather than to the criminal standard. So in order to determine whether Mr P has been the victim of a scam as defined in the CRM code I need to consider whether the purpose he intended for the payments was legitimate, whether the purposes he and R intended were broadly aligned and then, if they weren’t, whether this was the result of dishonest deception on the part of R. The broad purpose of Mr P’s payments to R were to pay for the costs involved in landscaping his front and rear garden, driveway and patio. And I have no doubt that Mr P thought the payments were for legitimate purposes. But I’m not satisfied the evidence I’ve seen shows that R intended a different purpose for the payments, or that Mr P’s and R’s purposes for the payments weren’t broadly aligned. Nor have I seen any evidence that persuades me that R dishonestly deceived Mr P. Mr P has provided evidence that the quality of the work completed by R wasn’t of a good standard and only a fraction of the agreed work was carried out. He’s also been left with waste and an excavated lawn. But, as I explained above, disputes about the quality of work are specifically excluded from the CRM code. And tradespeople can fail to complete work or complete work to a poor standard for a variety of reasons that aren’t fraudulent. So this evidence in itself, is not sufficient to show that the builder intended to operate a scam or to defraud Mr P from the outset. Our Investigator explained that she had seen the bank statements of the account Mr P paid. While these can’t be shared or described in great detail because of data protection laws, she was persuaded that Mr P’s first payment did look to have been broadly used for its intended purpose of purchasing materials. But she could see the rest of the payments didn’t appear to have been used for the purposes Mr P referenced when making the payments. I understand why the Investigator reached this conclusion. But when considering the intended purposes of the payments, I don’t think R’s bank statements on their own show that R had a different or fraudulent purpose in mind for the payments Mr P made. While the statements for R’s account don’t appear to show that most of Mr P’s payments were directly used to pay for the specific materials and services R gave when he asked for

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the payments, he did turn up and provide the services and some of the materials Mr P paid for, in line with what the payments were supposedly for. For example, Mr P has confirmed that a tree surgeon did attend his property and remove bushes and a couple of trees. A brick layer did attend his property and built two new walls. A digger was supplied to excavate the garden and on occasions the garden waste was removed as expected. Mr P has also provided evidence to show that the patio was partially laid, with the slabs that he chose – albeit it wasn’t completed and not all the slabs were provided. He has also been supplied with some of the sleepers he paid for, though not all of them. It’s not for me to comment on how R ran his business or paid for the different aspects of the project. But the fact R did supply materials that were used, and the services of third parties such as a brick layer, a tree surgeon and a digger suggests that even if R’s payments weren’t directly used to pay for these services and materials, they were provided and on balance likely paid for by R somehow. While R would generally say what the requested payments were going to be used for when he requested them, I have to keep in mind that ultimately all the payments Mr P made to R were going towards the total cost of the project as per the original estimate. And it’s not uncommon for tradespersons to use money or supplies leftover from other jobs or a stockpile of materials they already have, but still charge their customer. Similarly, a tradesperson has to make a profit and pay their staff which isn’t accounted for in the reasons given by R for needing payments each time he asked for money. At one point R asked Mr P if he could pay him to help him buy a new van after his had been stolen. R said this would come out of his profits – so it wasn’t a request for an extra payment on top of what was agreed. Based on my research, I can see that around that time, there was a post on the business’ social media page about the van being stolen. I can’t definitively say that was true, or that R definitely used the money Mr P sent him to help him buy a new van. But based on what I’ve seen it’s plausible that R’s van was stolen and he did need some funds to help him get a new one quickly to be able to continue to trade. It also seems some of the delays in the work were due to R sourcing a new van, then having issues with the replacement van. Again, I don’t know if that was true, but it’s certainly plausible. I’ve considered that Mr P has attempted to get the work that was completed valued. Mr P has said he had two independent landscapers attended his property though neither would commit to saying how much somebody else’s work was worth. One suggested that it could be around £7,700 after a quick look around. Mr P has also said that one of R’s former workers told him the value of the work completed was only around £4,000. Mr P has also said that R’s former worker said he was sometimes told to turn up and look busy. So there’s some dispute about the value of the work that was completed. In any event, it seems to me that a not insignificant amount of work has been done, albeit to a poor standard and only a fraction of what was expected. But this isn’t a sign of someone who didn’t intend to carry out any work or engage with the project from the outset. I’ve also considered more broadly whether the evidence suggests R wasn’t a legitimate supplier of goods. I have considered that R was running a duly registered limited company, but the payments Mr P made were to a personal account and not a business account – which is unusual. But its not for me to comment on how R ran his business, and this on its own doesn’t suggest he had an intent to defraud Mr P. The company has since been dissolved but businesses can fail for various reasons such as poor management or financial difficulty and isn’t in itself an indication of fraud. I’ve also thought about the fact that attendance at Mr P’s property was sporadic and there were months when no work was completed at all. But the reasons given are plausible – such as his van being stolen, poor weather and illness. This might also have been due to poor management or a lack of professionalism on the part of R – rather than an intention to defraud Mr P.

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I haven’t seen any evidence that persuades me that R was most likely acting fraudulently at the time of the payments with no intention of completing the job. Having looked at the available communication between Mr P and R, I can’t see any undue pressure being put on Mr P to pay more than he was expecting and there were no threats being made or spiralling costs (which in my experience can be common signs of a scam). R’s bank has also confirmed it hasn’t received any other fraud reports. From my research I can see the business had an active social media profile with a lot of followers, pictures from other jobs and comments on the page from other people. I haven’t been able to find anything negative in the public domain about R or his business and nothing that suggests to me he was a fraudster. The business’ social media page was active until May 2024 – around the time Mr P made his last payment. It seems to me something did happen around that time, but I don’t know why his business activity suddenly ceased. And I appreciate that Mr P made payments in April and May 2024 for materials and services he doesn’t appear to have received. But on balance, I’m not persuaded by the available evidence that the most likely reason for this is fraud and not other reasons such as his business failing for other legitimate reasons. I sympathise with the position Mr P has found himself in. I appreciate that he paid a lot of money and that his property has been left with incomplete work that wasn’t up to standard and will cost more money to rectify. I’m also in no way saying he did anything wrong or that he doesn’t have a legitimate grievance against R. But I can only look at HSBC’s responsibilities here and, for the reasons I’ve explained above, I don’t think it would be fair to hold HSBC responsible for the money he lost. I haven’t been made aware of any other investigations in to R or his business by either the Police or any other body such as Trading Standards. It's possible that material new evidence may become available at a future date which suggests that R did take the payments using dishonest deception (for example if the police investigate R and his company and he is later convicted). If that happens, Mr P can ask HSBC to reconsider his claim for these payments and, if not satisfied with its response, bring a new complaint to our service. Should HSBC have done anything else to prevent the payments? I have gone on to consider whether there is any other reason I can require HSBC to reimburse Mr P. Interventions There is an expectation for HSBC to be on the lookout for, and to protect its customers from, potentially falling victim to fraud or scams. This includes monitoring accounts and identifying suspicious activity that appears out of character. Where potential fraud is identified, I would expect HSBC to intervene and attempt to prevent losses for the customer. Having looked at the payments Mr P made, and compared them to his usual account activity, I think only the first payment was sufficiently unusual or suspicious enough that HSBC should have been concerned that he was in danger of financial harm. It was significantly larger than any of the payments he’d made from his account in the six months prior and was to a new payee. HSBC has confirmed that when the new payee was setup the details Mr P provided matched the recipient account details. HSBC asked Mr P for the purpose of that payment and he chose one relevant to paying bills. HSBC showed him a written warning that included common signs of scams and some suggested actions to take relevant to the answer he provided. I think this was an appropriate and proportionate response to the fraud risk. I don’t think the rest of the payments would have appeared unusual enough to HSBC to be indicative of a fraud risk. The payments didn’t follow any recognised scam patterns, the

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payee quickly became established and while some of the payments were still significant, they were all less than the first one. Even if I was satisfied that HSBC should’ve intervened further when Mr P made the payments, I’m not satisfied that it could’ve prevented his loss. I say this because all of the information that Mr P had available at that time suggested that R was a tradesperson who he had met in person and had seen complete work on his neighbours’ property – and as time went on, his own property. If HSBC had carried out any independent checks it wouldn’t have found anything in the public domain to suggest that R and his business wasn’t a legitimate tradesperson at the time. So, if HSBC had asked questions about the payments, I’m not satisfied that the information Mr P would’ve shared with it should’ve concerned HSBC that he was potentially at risk of financial harm from fraud. So, I can’t fairly say HSBC could’ve prevented Mr P’s loss. I’m really sorry to disappoint Mr P and understand why he feels HSBC should refund him. But, based on the evidence, I’m not persuaded I can fairly hold HSBC liable for his loss. Recovery of funds HSBC hasn’t said whether it tried to recover Mr P’s funds when he reported the matter to it. But I would only have expected HSBC to have attempted to recover the funds from the bank that received them, if it thought Mr P was the victim of a scam. Because I’ve come to the conclusion that what happened wasn’t an APP scam, I can’t hold HSBC liable to reimburse Mr P for not attempting to recover the funds from the recipient bank account either time he attempted to raise a claim. In any event, I can see from the recipient account statements that Mr P’s funds were utilised before he reported the matter to HSBC – so there wouldn’t have been any of Mr P’s funds to recover in any event. Compensation Our Investigator recommended HSBC pay Mr P £100 compensation. This was for reaching the decision that Mr P hadn’t been scammed without looking more deeply into what had happened. I know from everything Mr P has told us that this matter has caused him a significant amount of stress and upset, and this is exacerbated every time he has had to revisit and re-explain what has happened – whether that be to HSBC, our Service or other organisations. I also appreciate that Mr P sent a letter to HSBC in March 2025 it says wasn’t received and in a follow up phone call Mr P was told a decision had already previously been made, without allowing him to read aloud the letter he’d sent. I haven’t been able to listen to that call nor do I know why HSBC didn’t receive the letter. But considering I’ve reached the same conclusion as HSBC, that what happened wasn’t an APP scam, I can’t say HSBC reached the wrong conclusion either time it told Mr P its outcome. While I appreciate that Mr P was upset with HSBC’s answers, and the way it handled his call, I can’t say it acted unfairly or unreasonably in giving him those answers. As such I don’t intend to say HSBC should pay Mr P any compensation. Summary I’m very sympathetic to the position Mr P finds himself in and what he has been through. And I am sorry to have to deliver this news to him. But for the reasons I have explained and based on the available evidence I have seen; I consider the matter is a civil dispute which isn’t covered by the CRM Code and is therefore something that needs to be resolved between the two parties through alternative methods. I also don’t think HSBC could have

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done anything more to have prevented the loss of Mr P’s money or to recover it after Mr P reported his claim to it. It follows that I don’t think HSBC UK Bank PLC is liable to reimburse Mr P for his loss under the CRM Code or otherwise and doesn’t have to take any further action. My provisional decision For the reasons set out above, my provisional decision is that I do not uphold this complaint against HSBC UK Bank Plc. This is subject to any comments or further evidence either Mr P or HSBC UK Bank Plc may wish to make”. I said I’d consider anything further Mr P and HSBC submitted following the provisional decision. Responses to my provisional decision Both Mr P and HSBC responded to my provisional decision. HSBC agreed with the outcome and had nothing further to add, but Mr P did not agree. In summary, Mr P has asked that I reconsider my decision and reiterated that he believes R was acting fraudulently and so he should be reimbursed by HSBC in full as per the relevant scam reimbursement rules, plus compensation. Mr P has raised points about R’s conduct towards him and others, including allegations from someone that previously worked for R that said he had financial problems and hadn’t been paying his workers or suppliers. Mr P has also said that Action Fraud had told him that what had happened was fraudulent and that he should be refunded. 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. I have summarised the response in less detail than Mr P has provided. I want to stress that no discourtesy is intended by this. If there is a submission I have not addressed, it is not because I have ignored the point. It is simply because my findings focus on what I consider to be the central issues in this complaint. I have carefully considered the additional submissions provided, but they don’t change my decision. I appreciate the time Mr P has taken to reply to my provisional decision and make the points he has. However, the information and points raised are not new to me and were considered when I reached my provisional decision, and no additional evidence has been provided that changes my decision. Mr P has said that he has been the victim of an APP scam, and that his understanding of the rules is that banks, like HSBC, are required to reimburse victims of APP scams unless the customer has acted with gross negligence or is in collusion with the fraudsters. The relevant reimbursement scheme that applies here is the CRM Code. In my provisional decision I explained that the starting principle under the CRM Code is that a firm should reimburse a customer who is the victim of an APP scam, except in limited circumstances.

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But the CRM Code only applies if the definition of an APP scam as set out in it, is met. I have taken all of the circumstances and evidence into account when considering what is a fair and reasonable outcome. For the same reasons given in my provisional decision, I’m not persuaded that what has happened here meets the definition of an APP scam as defined by the CRM Code. As such, I don’t think HSBC needs to reimburse Mr P under the provisions of the CRM Code. I also considered whether HSBC was required to reimburse Mr P for any other reason, but for the reasons already explained, I don’t think HSBC could otherwise have prevented Mr P’s losses. I’m sorry for the situation Mr P has found himself in, and I recognise he has lost a lot of money and has been left in a very difficult and upsetting situation through no fault of his own. But for the same reasons I explained in my provisional decision, I do not find that HSBC is at fault here. As such, I still think the conclusion I set out in my provisional decision is correct, and I don’t think it would be fair and reasonable to hold HSBC UK Bank Plc liable for Mr P’s loss or to compensate him. It follows that HSBC UK Bank Plc isn’t required to take any further action. My final decision For the reasons set out above, I do not 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 21 April 2026. Mike Southgate Ombudsman

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