Barclays Bank UK PLC · DRN-6170978

Complaint Company L complains that Barclays Bank UK PLC didn’t pay a refund after it reported falling victim to a scam. This complaint has been brought on Company L’s behalf by Mr S, one of its directors. It has also been assisted by a professional representative. As it was primarily Mr S that interacted with the alleged fraudsters, I have, at times, referred to him in the text that follows. Background In early 2022, Company L invested its money with a company I’ll refer to as Company G. The details of the investment aren’t entirely clear. However, the agreement it signed appears to suggest Company G was structuring investments as a loan with the investor as the lender. The agreement says that “the Company shall utilise the Loan as proof of funds to enable a third party to arrange a line of credit…” and that investors could expect returns of 4% per month. Agreements would typically run to six months, although investments could be rolled over if both parties agreed. Mr S says he “was led to believe that the investment carried no risk, as the funds were held in a non-depletion account, with both capital and interest insured by a reputable insurance company, and a trustee overseeing the arrangement.” When the anticipated returns weren’t received, it occurred to Mr S that he might have fallen victim to a scam and so he notified the bank. It didn’t agree to refund him. Mr S wasn’t happy with that and so he referred his complaint to this service. It was looked at by an Investigator who didn’t uphold it. Mr S disagreed with the Investigator’s opinion and so the complaint has been passed to me to consider and come to a final decision. Findings I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. As a starting point, the legal position is that a firm is generally required to process payments and withdrawals authorised by its customer, in line with the Payment Services Regulations (in this case, the 2017 regulations) and the account terms and conditions. It is accepted that the disputed payments were authorised, so Company L is presumed liable at first instance. However, that is not the end of the story. Barclays was a signatory to the Contingent Reimbursement Model Code (CRM Code) which required banks to pay refunds to scam victims in certain circumstances. In addition, good industry practice required Barclays to monitor account activity or transactions that appear unusual or out of character and could indicate a risk of fraud. Where such concerns arise, I would expect the firm to take steps to protect its customer. This could involve issuing a clear warning during the payment process or contacting the customer to understand the circumstances behind the transaction. However, none of those expectations are relevant unless I’m persuaded Company L was the victim of a scam. The threshold for establishing fraud is a high one. In criminal proceedings, the standard of proof is “beyond reasonable doubt” but this service assesses cases using the civil standard of proof, which is based on the balance of probabilities. Under this standard, a finding of fraud must be more likely than not. Even so, the bar remains high. It is not enough for fraud to be a compelling or persuasive explanation, nor is it sufficient for it to

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be the most likely among several possible explanations. It must be more probable than the opposite conclusion i.e. that fraud did not occur. I understand that Company L invested its money and expected to be paid the returns that were promised. When that didn’t happen, I can understand why Mr S concluded that this must be a scam. However, the mere fact that the company it invested with failed and therefore couldn’t perform its side of the contract doesn’t necessarily mean it’s the victim of a scam. Companies can fail for a variety of reasons that have nothing to do with fraud. It seems just as likely that this was a case of a legitimate investment that had gone wrong, rather than Company L being the victim of a scam. The representatives have said that one of the directors of Company G has a documented history of taking investor funds and failing to repay them. However, I’ve not been able to find anything in support of this claim, and Mr S’s representatives haven’t provided anything to substantiate it either. I’ve also had sight of the bank statements for the receiving account. I’m limited in terms of how much I can say about these, but unfortunately there’s nothing in there that’s consistent with this having been an APP scam. I am not seeking to downplay the seriousness of what has happened. Company L invested a substantial amount of money and has clearly been let down by Company G. However, my role is to determine whether the loss can properly be attributed to an APP scam. Nothing I’ve said in this decision should be taken as a declarative statement that Company G was legitimate and so Company L can’t have fallen victim to a scam. While I remain open to the possibility that it did, its representatives have only put forward a hypothesis that returns weren’t received because Company G was operating a scam. They’ve not provided any evidence to support this assertion. In the absence of such evidence, there is no reasonable basis on which I could reach a finding in its favour. If additional evidence becomes available, Company L should make it available to Barclays so that it can reconsider his claim. If it’s unhappy with the response, it may be able to refer a new complaint to this service. Final decision For the reasons I’ve explained above, I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask L and L to accept or reject my decision before 28 April 2026. James Kimmitt Ombudsman

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