Lloyds Bank PLC · DRN-6184821

The complaint Mr B complains that Lloyds Bank PLC won’t refund the money he says he lost to a scam. What happened In March 2023, Mr B was made aware of an investment opportunity regarding the forward purchase of gold which would then be delivered three years later. This opportunity was promoted to him by an individual working for a company which I’ll refer to as G, however, Mr B’s investment itself was with a company whom I’ll refer to as T. After agreeing terms, Mr B made a payment of £6,673.86 on 9 June 2023. This was to purchase 5oz of gold at a 15% discount on market value, with the agreement being that in three years Mr B could either receive his gold or sell it at the market value at that time. But Mr B then became aware of various issue with T, which ultimately confirmed it would not be able to meet its obligations to customers like Mr B, and entered insolvency. Mr B believes that he was defrauded by T, and by G, and that they misrepresented T’s financial situation, thereby deceiving him into making this payment. Mr B complained to Lloyds that he had been scammed, so he felt it should refund him for the payment. But Lloyds declined to refund Mr B, it said this was a civil dispute between Mr B and T. Mr B was unhappy with Lloyds’ response, so he referred his complaint to our service. One of our investigators looked into what had happened, but they concluded that it was reasonable for Lloyds to have declined Mr B’s claim, as they agreed that this matter was most likely a civil dispute. Mr B appealed the investigator’s outcome. In summary, Mr B says the investigator’s view was based on a false assertion that UK Finance had determined this was not a scam, that others who invested with T have been reimbursed under the CRM Code and that banks should be acting with consistency, and that all the available evidence supports this was a scam, particularly with reference to T’s financial situation over the relevant period. 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. In this decision I’ve focussed on what I think is the heart of the matter here. As a consequence, 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 a fair and reasonable outcome. Our rules allow me to do this, reflecting the informal nature of our service as a free alternative to the courts.

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Having done so and having thought very carefully about Lloyds’ actions, I broadly agree with the findings set out by our investigator. I do appreciate how disappointing this will be for Mr B but, whilst I’m sorry to hear of what’s happened, I don’t think I can fairly hold Lloyds liable for the loss. This is because not all cases where individuals have lost sums of money are in fact fraudulent and/or a scam. So, whilst I can quite understand why Mr B feels that this was a scam, there is a high legal threshold or burden of proof for fraud and there are a number of potential reasons (other than a scam) for the breakdown in a relationship between two parties and for a dispute to exist. When considering what is fair and reasonable in this case, I’ve thought about the Contingent Reimbursement Model Code (the CRM Code) which Lloyds was signed up to, and which was in force at the time Mr B made this payment. Under the CRM Code, the starting principle is that a firm should reimburse a customer who is the victim of an APP scam. So, I’ve thought about whether the CRM code applies in the circumstances of this complaint, and whether Lloyds therefore ought to reimburse Mr B under the provisions of the CRM Code. The CRM Code only applies in very specific circumstances – where the customer has been the victim of an APP (authorised push payment) 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). If this was a scam, or fraud – then banks (including Lloyds) must follow industry and regulatory guidance, including the CRM Code, to check certain payments and in some circumstances, protect customers by stopping the payments and contacting customers about them. And where banks haven’t followed the guidance, they can be asked to refund them. 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. I do acknowledge Mr B’s strength of feeling in this matter and his concerns around the apparent lack of consistency across financial businesses, which have resulted in some claimants being refunded by their own banks, but not others. But I can only deal with the

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case before me. And looking at the information that has been provided about what has happened here, I don’t have enough to confirm that, at the point he made his payment, there was clear intention to defraud Mr B. T was formally incorporated in the UK in 2012, and there is evidence that supports legitimate mining and business operations, both in the UK and overseas. T’s operations include the presence of tangible assets and infrastructure of sizeable value. I also note that no evidence has been provided by the appointed Insolvency Practitioners that would otherwise indicate an illegitimate or fraudulent business. Instead the Company Voluntary Agreement (CVA) and supporting documentation shows T was experiencing financial difficulty as a result of various factors. And the CVA has allowed T to continue trading while repaying creditors over several years. I also understand there is no further action being taken in relation to criminal investigations by law enforcement in both the UK and abroad. That said, one of the CVA reports indicates that legal action is being pursued by T in an overseas jurisdiction against an agency that heavily disrupted its operations. I wouldn’t reasonably expect such actions to be taken by a firm that wasn’t operating legitimately. I note what Mr B has said and provided about T’s financial situation at the time he made his payment. But it is not an act of fraud for a business to continue its operations when it is experiencing financial difficulties. And having weighed up the evidence before me and what’s been presented by Mr B, I don’t think that what I’ve seen provides any clear proof that any false representations were made, or demonstrates a clear intention on T’s (or G’s) part to take his money knowing that T’s contractual obligations could not be met at that time. Overall, I’m unable to fairly and reasonably conclude here that T (nor G on its behalf) was - more likely than not – fraudulent, or dishonestly deceiving Mr B at the time it took his payments. Instead, the evidence strongly supports the conclusion that T was likely a legitimate business that fell into financial difficulty. I’m therefore not persuaded it would be fair to make Lloyds refund him under the CRM code – as I don’t have compelling evidence of an APP scam. I appreciate this will be disappointing for Mr B, who I accept hasn’t received what he was expecting and has been left at a substantial loss. And I also understand that Mr B has been through a difficult time personally, and feels he was particularly vulnerable at the time of this payment. But I am only able to consider this complaint under the provisions of the CRM Code, or other rules and guidance around how banks should deal with scams and fraud, if I am satisfied he has been the victim of fraud, as defined by the Code. And having looked carefully at all that we have been provided by both parties to this complaint, I am not persuaded that he has been. So, I cannot fairly conclude that Lloyds acted unfairly in declining his claim. My final decision I do not uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 28 April 2026. Sophie Mitchell Ombudsman

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