Lloyds Bank PLC · DRN-6046466

The complaint Miss J complains that Lloyds Bank PLC (‘Lloyds’) won’t refund her money she says she’s lost to an authorised push payment (‘APP’) scam. Miss J referred her complaint to this service with the help of a professional representative. However, for ease of reading, in the main, I will refer to Miss J throughout this decision, even when referencing what her representatives have said on her behalf. What happened The circumstances of the complaint are well-known to both parties. So, I don’t intend to set these out in detail here. However, I’ll provide a brief summary of what’s happened. In and around October 2024 Miss J relocated abroad. Whilst residing there, Miss J was contacted by a close family friend (whom Miss J had met face to face and on multiple occasions) who I’ll refer to going forward as ‘L’. L introduced Miss J to a cryptocurrency investment. Miss J says L presented himself as an expert in cryptocurrency and offered to help her in investing and managing on her behalf. On the belief of what L had told her, Miss J proceeded with the investment and sent a payment of £10,000 to L’s account on 5 January 2025 (showing on the bank statement as debited on 6 January 2025). She says L assured her that the payment would be facilitated through L’s personal cryptocurrency account. Miss J said L provided her with regular updates, including weekly screenshots that purported to show the investments progress. Encouraged by what she was seeing and was being told, Miss J sent a further payment for £20,000 to L’s personal account on 9 January 2025 – again on the belief that the payment would be facilitated through L’s personal cryptocurrency account. However, shortly after this payment, Miss J says L became increasingly evasive and when she requested transaction records to verify the investments, L failed to provide any documentation and became unresponsive. Believing she’d fallen victim to a scam. Miss J raised the matter with Lloyds, but it didn’t consider it liable for Miss J’s loss. In summary, this was because it thought what had happened was a civil matter. Unhappy with Lloyds’ response, Miss J brought her complaint to this service. One of our Investigators looked into things. But they agreed with Lloyds, that this was most likely a civil dispute, and so Miss J was not entitled to a refund of the payments she had made. Miss J didn’t agree with our Investigator’s view, she maintained that what had happened was a scam. As agreement couldn’t be reached, the complaint has been passed to me for a final decision.

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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 intend to keep my final decision relatively brief here and I’m very aware that I’ve summarised this complaint briefly, in less detail than has been provided, and in my own words. No discourtesy is intended by this. Instead, I’ve focussed on what I think is the heart of the matter here. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it. I haven’t. Instead, it’s because the evidence and outcome have already been explained to Miss J (and Lloyds) by our Investigator. And having considered what our Investigator has said, whilst thinking about the available information and evidence myself, I see no reason to reach a different outcome. I’ll explain why. 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 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 Miss J and L 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. Having thought about this carefully, I’m not satisfied that Miss J’s payments are covered by the Reimbursement Rules.

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Miss J paid L, who was the intended recipient and was the person who received the funds. So, Miss J cannot be said to have paid a recipient she did not intend to pay, as per the definition above. Miss J’s purpose for the payments was to send to L, on the assurance that the payments would be facilitated through L’s personal cryptocurrency account – for the purpose of L investing the funds in cryptocurrency. While I appreciate that Miss J hasn’t received what she was expecting and believes L has scammed her, based on what I’ve seen and been told, I can’t safely say the payment purposes were misaligned between Miss J and L. I will explain my reasons why. 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 L did intend to defraud Miss J, I’d need to see convincing evidence to show fraud is the most likely explanation over any other possibility. 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 payments were made), indicates that funds were sent onto a cryptocurrency account after they were received by L. It is not known what happened to the funds once they reached the cryptocurrency account, but the evidence seen suggests that Miss J’s money was sent on from L’s account and to what was a cryptocurrency account. So this doesn’t support that L had a different intention for the funds he received. Further, I’m not persuaded L sending the funds onto a cryptocurrency account is consistent with him setting out to defraud Miss J from the outset. I think it’s arguable that L sending the funds onto a cryptocurrency account is consistent with the purpose they’d both agreed. Again, I’m aware Miss J didn’t receive what she was expecting but I have to keep in mind that there are many reasons, other than fraud, why an arrangement might fail. In the circumstances of this case, Miss J sent funds to L who has been referred to as a close family friend - on the understanding that he would invest the funds into cryptocurrency via his personal cryptocurrency account. There was no formal paperwork/contract between Miss J and L, and I understand she had offered L a commission at the end of the investment, which was due to be discussed at a later stage. From what I’ve seen and been told it appears Miss J and L discussed the investment over the phone and via messaging apps. Looking at the chat messages provided to us; I can see Miss J and L were in contact after she made the payments. I haven’t seen anything that shows L blocked Miss J after the payments were received. When looking at chat messages, it appears they continued to communicate and it was around 21 January 2025 when Miss J asked L to provide a transaction history for the cryptocurrency account. It was from around then that L stopped responding to Miss J’s messages. I note on 27 January 2025, Miss J messaged L to say she missed him as a friend and that she knew deep down he didn’t set out to do bad by her – it was just the drugs. Miss J expressed that she hoped L came back to life soon and got off the drugs. L then returned to the conversation on 30 January 2025. I further note, a message from Miss J on 3 February 2025, telling L to only contact her if he was sober again and prepared to make a full amends. I don’t dispute that something has happened between Miss J and L, the messages suggest that Miss J is worried about L and indicate that L may have had personal circumstances that were impacting him. In the circumstances, I’m not persuaded what’s been indicated in and of itself is evidence that L set out with the intention to defraud Miss J at the time the payments were made. It’s equally as plausible that L’s personal circumstances changed.

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I’m aware Miss J has raised she is aware of other individuals who have suffered financial losses at the hands of L and who have reported the matter to the police. Miss J has told us that she contacted the police in January 2025 but has said the police failed to take action claiming it to be a civil matter. I’ve thought carefully about what Miss J has shared and while she’s said other individuals have suffered financial losses by L, the beneficiary bank has shared that no scam claims have been raised against the account. And I’ve not seen any evidence to suggest that any substantive lines of enquiry are being pursued against L, nor that any charges have been brought. While I’m mindful it isn’t necessary for a criminal conviction to have been secured or for charges to have been brought for what happened here to meet the Reimbursement Rules definition of an APP scam - the fact that the relevant authorities appear not to be pursuing a substantive investigation into the allegations raised by Miss J and potentially others suggests to me that the evidence presented does not, on its own, currently carry sufficient weight to support a finding of fraud. Further, I’m mindful Miss J has said an employee at the beneficiary bank confirmed to her that an amount of just under £30,000 was present in L’s account and had been frozen due to fraudulent activity. While I can’t comment on what was discussed between Miss J and an employee at the beneficiary bank, I’ve not seen any evidence that suggests fraudulent activity. I acknowledge Miss J feels the payments were induced by a false “managed crypto trading” proposition-promises of expertise, specific trading strategies, and safeguarded use of funds, which she says were never honoured. And that immediately after receipt of the payments, L blocked communication, failed to provide genuine account history or execution records. But I’m not persuaded based on everything I’ve seen and been told that this means her funds weren’t sent to where she was told they would be – L’s personal cryptocurrency account. For completeness, in February 2026, Miss J informed our service of a development – that she’d received unsolicited contact from L. She said L told her he intended to travel to Miss J’s location (where she resides) and proposed to discuss repayment. At the time of the update, Miss J said no admissions were obtained and no repayments had yet been made. I’ve carefully considered the update provided from Miss J and having done so, I see no reason why this ought to delay me sharing my findings on the complaint. While I’m not aware if any reimbursement has been received following L’s contact with Miss J or the update to us, I don’t find this contact from L to be typical of usual scammer behaviour. Had L set out with the intent to defraud Miss J from the outset, I’m not persuaded he would get in contact with her, at a later date, and invite discussion about repayment. More typically, once a scammer has taken money from their victims, they will not reach out to them like this. Overall, having thought very carefully about all that Miss J 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 that L set out with an intent to defraud Miss J. I’m mindful within her submissions to this service Miss J feels strongly that Lloyds ought to have intervened when the payments were made and that had it done so her loss would’ve been prevented. But for the reasons I’ve set out above, I don’t think Lloyds has acted unfairly in not reimbursing Miss J the money she’s lost under the Reimbursement Rules. I also don’t find any other reasons why Lloyds should refund her the money she’s lost. I know this will be a huge disappointment to Miss J, and I appreciate how strongly she feels about this case. But for the reasons I’ve explained above, I do not consider that it was unreasonable for Lloyds to decline Miss J’s claim under the relevant Reimbursement Rules.

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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 Miss J to accept or reject my decision before 23 April 2026. Staci Rowland Ombudsman

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