National Westminster Bank Public Limited Company · DRN-6240429

The complaint E, a limited company, complains that National Westminster Bank Public Limited Company (NatWest) has declined to reimburse payments it made which it now considers were an APP scam. E brings the complaint with the benefit of professional representation. While submissions have been made on E's behalf, for ease of explanation throughout I will refer to all submissions as having been made by E. Alongside this complaint, E has also complained about the bank that received the payments. The following decision addresses the complaint brought against NatWest. What happened E is a company which is registered on Companies House as being involved in the sale of new and used cars. It holds a business account with NatWest. In 2023, Companies House records that two persons held significant control over E (who I’ll refer to as Mr A1 and Mr A2). Mr A1 says he was introduced to someone who said they could source new supercars for import at discounted prices. I’ll refer to that individual as Mr Q. In order to purchase the new vehicles, deposits would need to be paid. But rather than paying the manufacturers directly, E would need to pay these deposit funds to Mr Q (as he had the supposed connections to the manufacturers needed to obtain the vehicles). Once the new vehicles had been manufactured, Mr A1 was told significant financial returns could be achieved when the vehicles were resold. He was told these returns would be between 50% to 100% depending on the vehicle. Another limited company (a pharmacy run by Mr A2 which I’ll refer to as Company P) paid a total of £200,000 to E, which it appears was used to fund the majority of the deposit money paid by E to Mr Q. Mr A2 says this was in turn funded by a loan obtained by Company P. He says that loan had the stated purpose of being used to fund E. In total, E paid Mr Q a total of £201,689.50 by bank transfer from its business account with NatWest.1 This represented deposits on five different vehicles to be manufactured and 1 E says it paid a further £26,750 in cash to Mr Q in respect of four of the five vehicles. However, these cash sums do not appear to have been drawn from E’s account with NatWest. They do not therefore appear to be part of the complaint about E’s account with NatWest. I have excluded from the table two further payments to Mr Q that appear on E’s bank statement. These were both for smaller sums and made on 24 April and 27 April, in the sums of £2,500 and £160. The payments carried the payment narratives “Car Repairs” and “Fuel” respectively. E says it does not recall the purpose of these payments. The amounts and payment narratives don’t suggest these relate to deposits on vehicles to be manufactured and imported. It is possible these smaller payments were legitimate transactions entered into by Mr Q to gain trust and so continue to procure

-- 1 of 9 --

imported. These are shown below, together with the loaned funds from Company P: Date Faster Payments Out Credits received Funds returned by Mr Q Payment from/to Payment Narrative 04-Nov-22 £50,000 Company P Loan 04-Nov-22 £50,000 Company P Loan 13-Mar-23 £14,000 Mr Q Revuelto 18-Mar-23 £20,000 Mr Q Porsche 19-Mar-23 £750 Mr Q Porsche 29-Mar-23 £38,000 Mr Q Ferrari F250 29-Mar-23 £50,000 Company P Loan 30-Mar-23 £30,000 Company P Loan 31-Mar-23 £20,000 Company P Loan 05-Apr-23 £50,000 Mr Q Ferrari F250 11-Apr-23 £28.50 Mr Q Ferrari 14-Apr-23 £50,000 Mr Q Ferrari 16-Apr-23 £9,000 Mr Q Ferrari 01-May-23 £2,200 Mr Q Merc 03-May-23 £17,711 Mr Q Merc 05-Jun-23 £25,000 Mr Q Depo Ref 21-Jun-23 £25,000 Mr Q Depo Ref 22-Jun-23 £7,000 Mr Q Depo Ref TOTALS £201,689.50 £200,000 £57,000 E was subsequently sent what appeared to be invoices from the various manufacturers. These purported to show the receipt of the deposit funds and the remaining balance due for the purchase. The deposit amounts appear to represent a small percentage of each vehicles’ total price. By way of example, the (apparently faked) invoice provided for one of the vehicles shows the deposit paid was just 10% of the 800,000 Euro total price. It doesn’t appear that the vehicles were due to be supplied immediately, given the time it would take for them to be manufactured. So initially things appeared as expected. However, Mr A1 says he was contacted by someone who made him aware that Mr Q might not be legitimate and had defrauded others. Mr A2 then contacted Mr Q who confessed in writing (witnessed by a solicitor) that he had defrauded E. When challenged about the transactions, Mr Q transferred a total of £57,000 back to E’s account with NatWest over the course of three separate payments. But he has not returned anything further. the larger payment amounts E was sending for what is alleged to have been the vehicle deposit scam.

-- 2 of 9 --

The matter was reported to the Police and to Action Fraud, it appears neither has been able to take any action about the matter (despite Mr Q’s apparent confession). This may be a direct consequence of Mr Q’s whereabouts now being unknown, and the suspicion he may have left the country. E says it is contractually liable to repay Company W for the funds it loaned and which appear to have financed E’s transfers to Mr Q. Allowing for the repaid monies and excluding the cash payments which do not appear connected to E’s NatWest account the effective net loss incurred by E appears to equate to £144,689.50. E has asked NatWest to reimburse its loss, explaining that it believes it has been the victim of a criminal Authorised Push Payment Scam (APP scam). NatWest at the relevant time was a signatory to the Lending Standards Board’s Contingent Reimbursement Model Code (the CRM Code). The CRM code was a voluntary code requiring firms to reimburse some victims of APP scams. However, it does not apply to what is referred to in the wording of the code as being a ‘private civil dispute’. NatWest declined to reimburse E. It has since argued that the CRM Code does not apply because the payments made by E to Mr Q should be the subject of a private civil dispute and were not a criminal APP scam. Outside the CRM Code’s provisions, it says it was not at fault and is not liable to reimburse any losses that resulted from E’s payments. Unhappy with NatWest’s response, E asked our service to review the matter. I issued my provisional findings on the merits of this complaint in my provisional decision, dated 18 February 2026. In my provisional findings I explained why I intended to uphold the complaint in part and offered both sides the opportunity to submit further evidence or arguments in response. An extract of that decision is set out below and forms part of this final decision: In broad terms, the starting position at law is that a bank such as NatWest is expected to process payments and withdrawals that a customer authorises it to make, in accordance with the relevant Payment Services Regulations and the terms and conditions of the customer’s account. Here, neither side disputes that E authorised the alleged scam payments to Mr Q. In the first instance, E is therefore presumed liable for the amounts it instructed NatWest to pay. That being said, where the payments can be shown to have been the result of dishonest deception intended to defraud the payer, NatWest may fairly and reasonably be required to reimburse the resultant losses in some circumstances. The CRM Code The voluntary CRM Code provides additional protection for APP scam victims, including micro-enterprises. That can include reimbursement of losses. But the CRM Code only applies where a payment was made as the result of an APP Scam. The relevant part of the CRM Code defines an APP Scam as being a transfer of funds to another person for what the customer “believed were legitimate purposes but which were in fact fraudulent.”

-- 3 of 9 --

This is contrasted with a private civil dispute which the CRM code says can include: “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.” NatWest says it considers this to be a private civil dispute, and therefore the payments are not covered by the CRM Code. In support of this being an APP scam, E has provided, amongst other things, a copy of a confession signed by Mr Q and witnessed by a solicitor, purchase invoices relating to the vehicles being bought, a copy of Mr Q’s bank statements and an anonymously circulated notice saying Mr Q is a scammer. I cannot give much weight to the circulated notice. This could be considered merely hearsay, and there is nothing to show the provenance of the allegations made or evidence provided to support these. I have however given some weight to the purchase invoices. While on the face of it they might look genuine, I am not persuaded these are anything other than fake documents designed to give the impression of legitimacy. The amounts and payment details bear no relation to the subsequent payments made by Mr Q. Simply put — I consider that these invoices were wholly fake and created to give the appearance of legitimacy to a fraudulent transaction. I am also not persuaded that the other evidence available to me is consistent with Mr Q legitimately entering into an agreement to supply these vehicles to E. The activity on Mr Q’s bank account (which I cannot detail here) is not consistent with that interpretation. Any payments made by Mr Q to car related companies do not appear linked to the purported new vehicles but rather seem most likely to me connected to his other activity in used cars. There is nothing corresponding to payments to manufacturers as the faked invoices might otherwise suggest should have been seen. And the value of those payments is significantly lower than the sums paid by E, nor does the timing correspond. In short, these payments do not appear directly related to E’s payments. That being said, at least one of E’s directors had met Mr Q in person. That is relatively uncommon in APP scam cases. But I don’t find it compelling evidence against this having been deliberate fraud committed by Mr Q against E. Rather I think that the in- person relationship was likely intended by the fraudster (alongside the faked invoices) to bolster the impression of legitimacy and gain the director’s trust. I don’t consider this factor demonstrates there was no APP Scam. All taken into consideration, I don’t find NatWest was correct in stating this was a private civil dispute — applying the balance of probabilities, I find the evidence is instead consistent with this having been an intentional APP scam from the outset. In other words, I’m satisfied that it is more likely than not E’s funds weren’t used for the intended purpose and that Mr Q obtained E’s funds as the result of dishonest deception about his purposes. So, I find that E’s payments listed above meet the definition of an APP scam under the CRM Code and otherwise fall within the code’s scope.

-- 4 of 9 --

Reimbursement The CRM Code says that E is entitled to be reimbursed unless NatWest can establish that an exception to reimbursement applies. NatWest has not provided evidence to establish that it could apply any of the exceptions listed in the CRM Code (stating instead that it considers this is a private civil dispute to which the CRM Code does not apply). In its final response, NatWest did refer to the provision of a scam warning, but it appears the bank has been unable to evidence exactly what warning may have been given, how that might relate to the scam that took place or for which payment(s) it was shown. As I have set out above, having carefully considered the evidence here I consider that on the balance of probabilities this was an APP scam and that the CRM Code does apply to those payments made from E to Mr Q that I have listed in the above table. I’m not satisfied that NatWest has evidenced it may rely on any of the permitted exceptions to reimbursement. I am currently minded to decide that NatWest should properly have reimbursed E for the net loss that resulted, a total of £144,689.50. Had NatWest refunded E when it initially considered its scam claim, then E would not have been deprived of this sum for the time it has been. The funds had been loaned to E by Company P for commercial purposes. It is unclear how E would have used the funds had it not invested these into Mr Q’s scam. But to fairly reflect that loss of use I consider it would be fair and reasonable to require NatWest to pay interest on the amount it is reimbursing at a rate of 8% simple per year. The bank should calculate this interest from the date it first declined to reimburse E until the date of settlement. I invited both sides to provide any further arguments or information by 3 March 2026, after which point, I said I intended to issue my final decision on the matter. 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 deciding what’s fair and reasonable in all the circumstances of a complaint, I’m required to take into account relevant: law and regulations; regulators’ rules, guidance and standards; codes of practice; and, where appropriate, what I consider to be good industry practice at the time. Where the evidence is incomplete or missing, I am required to make my findings based on a balance of probabilities – in other words what I consider is most likely given the information available to me. Responses to my provisional decision E responded on 24 February 2026, saying it accepted the provisional decision. NatWest initially requested an extension until 10 March 2026, to permit it to respond fully. This was agreed. It was however able to respond within the original timeframe, on 27 February 2026. In its response, the bank explained that it did not agree with the provisional decision. The bank said it believed there were several material points which had not been fully considered in the provisional decision, relating to both factual conclusions and the interpretation of

-- 5 of 9 --

evidence. In summary these were: • There was no evidential basis to conclude that this was an intentional APP scam from the outset. - There was no clear evidence to establish fraudulent intent at the point the payments were made. - Our Investigator had previously considered the case and had stated the opinion that the funds had been used as E had believed. Unless there was new evidence, to find otherwise was inconsistent. - The bank queried what evidence showed that this wasn’t simply a failed commercial arrangement, rather than fraud. • The later repayment of £57,000 by Mr Q to E was inconsistent with the actions of a scammer or an intentional scam. The bank questioned why an alleged fraudster might voluntarily reduce the proceeds of the alleged fraud – that contradiction with the finding of intentional fraud from the outset was not addressed in the provisional decision. • The bank queried what evidence there was to show that funds had not been used for the stated purpose. This contradicted the Investigator’s thoughts. In particular why did I consider the payments to a car-related payee (which I had acknowledged in the provisional decision) were insufficient to demonstrate that the payment purpose had been fulfilled. • The conclusion that the invoices were wholly fake was not the result of forensic review or, for example, by contacting the relevant manufacturers directly. This appeared to be an inference. • There had been in-person interaction on multiple occasions between a director of E and Mr Q. When they had visited car dealerships together, Mr Q had been recognised by the staff. This should be considered evidence of commercial legitimacy. • The outcome differed from the opinion of our Investigator, without explaining what new evidence had come to light or why the Investigator’s opinion was incorrect. I’ve carefully reviewed this complaint in the light of NatWest’s further comments and submissions. The queries raised by the bank relate to my interpretation of the available evidence and the factual conclusions drawn on the question of whether the disputed payments were the subject of an APP scam (rather than some alternative scenario, such as a legitimate commercial dispute between E and Mr Q). I accept that there has been no criminal conviction of Mr Q. He has not been formally charged with defrauding E, nor has a criminal investigation been able to establish that his intentions were fraudulent from the outset. And given that Mr Q appears to have left the country, it seems unlikely to me that UK law enforcement will be able to pursue their criminal investigation further. Nonetheless, despite the lack of a criminal conviction, I consider the evidence here supports a finding of APP scam on the balance of probabilities. As I set out in my provisional findings, where evidence is incomplete or missing, I make my findings based on the balance of

-- 6 of 9 --

probabilities — in other words what I consider is most likely given the information available to me. I reached the findings set out in my provisional decision on that basis. The available evidence includes an apparent confession in writing made by Mr Q (and in the presence of a solicitor) admitting he deliberately defrauded E of the sums it paid him. He confesses to transferring the funds to family and others. I accept it is possible that this confession is not genuine or perhaps was obtained improperly. But its contents do appear to correlate with other evidence. The improper use of funds referred to in the confession document corresponds with the beneficiary account history (and is at odds with the purposes E believed Mr Q had at the time). Indeed, the beneficiary account history does not show payments corresponding to the invoices produced by Mr Q. There are some payments made to what appears to be a second-hand car dealership. But the invoices provided to E by Mr Q in support of the need for deposit payments do not indicate any connection between that dealership and E’s purchases. Nor do the amounts paid to that dealership correspond (and in total are far less than E paid to Mr Q). The invoices instead indicate payment (a deposit amount to be paid prior to the new vehicle being manufactured) was to be made direct to the manufacturer. The invoices appear to have related to deposits on vehicles yet to be manufactured. In other words, not second- hand vehicles. If the invoices genuinely corresponded to payments made by Mr Q on behalf of E (or even by E itself) then it is unclear why no corresponding payments appear to have been made by either party. On the contrary the funds paid by E to Mr Q appear to have largely been dispersed to personal accounts belonging to various third parties (seemingly therefore in line with his confession). NatWest says these invoices should be forensically examined or that the manufacturers should be contacted to confirm they are fake. I don’t agree that is necessary for me to reach a finding on this point on the balance of probabilities. The available evidence leads me to the conclusion that, more likely than not, these were not genuine, and do not relate to payments made in good faith as deposits for the yet to be constructed vehicles named on the documents. The later return by Mr Q of a portion of E’s money does not seem to me inconsistent with him having originally obtained the funds for fraudulent purposes. Arguably, Mr Q’s actions in making such payments after the alleged scam had been uncovered were to Mr Q’s own benefit (perhaps intended to delay the risk of prosecution long enough to relocate overseas and evade criminal charges altogether). In such a reading, the return of a proportion of the funds was simply a ruse designed to ‘buy time’ to evade justice, not evidence that the original transactions were somehow legitimate. On the balance of probabilities, I’m not persuaded that the partial return of funds is persuasive evidence that Mr Q had legitimate purposes (or that he did not perpetrate an APP scam here). Turning to the ‘in-person’ nature of the scam, as I acknowledged in the provisional decision this is not typical of APP scams. But I do not accept it is inconsistent with an APP scam. Here the nature of the deception involved trust being established with E’s director over a period of time (otherwise E’s director would not likely have made the considerable payments he did). I consider it was an integral part of the scam that took place. If indeed Mr Q was acknowledged by staff in a luxury car dealership, I wouldn’t find that compelling evidence

-- 7 of 9 --

against this having been a scam – again that strikes me as being an integral part of the deception of E’s director. All taken into account, I find it most likely that this was an APP scam at the time the payments were made. In find it most likely based on the evidence before me that the parties’ purposes for the payments did not align, as a consequence of dishonest deception. I am persuaded on the balance of probabilities that E made these payments believing they were being procured for legitimate purposes, but the payee’s purposes were in fact fraudulent. In closing, I appreciate NatWest’s frustration that I did not reach the same conclusions as those of our Investigator when she gave her opinion on the complaint. In the majority of instances, an Investigator’s opinion is likely to be in line with any subsequent review by an Ombudsman. And I accept I have not reached the same findings in relation to the evidence. However, as NatWest will be aware, my role is to review complaints referred to me afresh and impartially, and to make my findings based on what I consider to be fair and reasonable in all of the circumstances. That means I may not always agree with the conclusions drawn by an Investigator even in relation to the same evidence. Here my findings are based on what I consider most likely given the evidence before me and on what I consider to be the fair and reasonable outcome in all the circumstances. All considered, I don’t think the points raised by NatWest in response to my provisional decision change my findings. The available evidence leads me to find that on the balance of probabilities, this was more likely than not an APP scam. I also find that the payments listed above that were sent to Mr Q are within the scope of the CRM Code. I don’t find NatWest has established that it can rely on any of the relevant exceptions to reimbursement under the CRM Code. Overall then, I consider it fair and reasonable in all the circumstances of this complaint that NatWest should now reimburse E in line with the provisions of the CRM Code. Putting things right I’ve carefully considered the responses I received to my provisional decision. But these have not changed my findings on E’s complaint, nor changed what I consider to be the fair outcome in all the circumstances. For the reasons set out in my provisional decision and above, I find it fair and reasonable in all the circumstances that E ought to have been reimbursed under the terms of the CRM Code. I require National Westminster Bank Public Limited Company to pay E: • the net sum of money E lost as a result of the scam, that being the sum of £144,689.50 (less any amounts the bank has already been able to recover or otherwise return to E). The bank should do so within 28 days of receiving notification of E’s acceptance of my final decision; plus, • interest at the simple rate of 8% per year on the above amount (less any tax properly deductible) to be calculated from the date of the payment until the date of settlement. My final decision For the reasons given above, I uphold this complaint and to require National Westminster Bank Public Limited Company to put matters right as I have detailed above.

-- 8 of 9 --

Under the rules of the Financial Ombudsman Service, I’m required to ask E to accept or reject my decision before 24 April 2026. Stephen Dickie Ombudsman

-- 9 of 9 --