Lloyds Bank PLC · DRN-6228695

The complaint Mr F complains that Lloyds Bank PLC (‘Lloyds’) won’t refund the money he says was lost as the result of a scam. What happened In 2025, Mr F purchased a car from a company I’ll refer to as W. These are the payments Mr F made from his Lloyds account. Date Details of transaction Amount 13.1.2025 Payment to W – a limited company £300 15.1.2025 Payment to C – a limited company £7,695 16.1.2025 Payment to W – a limited company £180 Mr F received the car, but says it broke down and became undriveable. W refused to accept liability and wouldn’t refund him, so Mr F raised a scam claim with Lloyds. Lloyds declined to refund Mr F saying he has a civil dispute with W. Mr F wasn’t happy with Lloyds’ response, so he brought a complaint to our service. An investigator looked into Mr F’s complaint and didn’t uphold it. The investigator said: • Mr F’s payments aren’t covered by the Faster Payment Scheme Reimbursement Rules as he received the car he paid for and quality of goods is deemed a civil dispute. • While Lloyds could’ve provided a better level of service, compensation isn’t due. • Lloyds had incorrectly told Mr F he had to attend branch to submit a Data Subject Access Request (‘DSAR’), but they had apologised and raised the DSAR request without Mr F attending a branch. • Although Mr F didn’t receive a final response letter from Lloyds until October 2025, Mr F was given the outcome of his scam claim in July 2025 when he reported the fraud. Mr F disagreed with the investigator’s view and raised a number of points. The investigator addressed these points, but Mr F asked for an ombudsman to review his case. While the case was awaiting allocation, the court case against W was settled with Mr F to be paid £9,000 and the car to be collected and transported at W’s cost. Mr F asked that the ombudsman consider the following points: • During the call in July 2025, he was verbally told that it was a buyer-seller dispute. But this is not the same as a formal decision under the PSR framework as it wasn’t in writing and he wasn’t told about escalation rights.

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• W never told Mr F that C was a separate legal entity and there wasn’t any explanation of their banking arrangement with them. Also, Mr F made payment to C, not to C Ltd and Lloyds didn’t properly assess this payment misdirection when he reported it. Mr F says he intended to pay W and was misled into paying C. Having reviewed the case, I reached a different outcome than the investigator. So, I Issued a provisional decision explaining why and giving both parties a chance to respond before a final decision was issued. My provisional decision In my provisional decision “What I’ve provisionally decided – and why” section I said: After initiating court proceedings, W has agreed to refund Mr F £9,000 (as an out of court settlement) and to collect the car at their own cost. We can assess Lloyds’ liability in relation to Mr F’s case, but as W is paying him more than the payments he made from his Lloyds account, I couldn’t fairly direct Lloyds to refund Mr F those payments. But, for completeness, I have explained why Lloyds wouldn’t have been required to refund Mr F for the payments, even if W weren’t making reparation. Did Mr F consent to the payments to W and C In broad terms, the starting position at law is that Lloyds are 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. Consent “must be given in the form, and in accordance with the procedure, agreed between the payer and its payment services provider” and it’s an objective test – under the PSRs. It doesn’t depend on Mr F being fully aware of the details of the payment at the time he completed the procedure, for it be considered that he has given consent. Here, Mr F set up C as a new payee and made the payment to them – which he also did for the payments to W. Mr F says that C’s company name is different to C Ltd, however the payment was made to the account details Mr F used to set up the payee. So, the payment is considered to be authorised and consented to under the PSRs. Even if Mr F was deceived about the purpose of the payment, that wouldn’t make it unauthorised. Based on the evidence, I’m satisfied that Mr F consented to and authorised the payments he made to W and C. Are Mr F’s payments covered by the Faster Payment Scheme Reimbursement Rules (“Reimbursement Rules”)? The “Reimbursement Rules” came into force on 7 October 2024 and apply to all UK-based Payment Service Providers (PSPs). They put a requirement on firms to reimburse APP scam payments made via the Faster Payments Scheme, in all but very limited circumstances. The Reimbursement Rules set out the requirements for a payment to be covered. Of relevance here: - It must have been made as part of an APP scam (whether to a recipient or for a purpose other than the payer intended); An APP scam is further defined as where fraudulent deception was used to obtain the funds

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where: • The recipient is not who the Consumer intended to pay, or • The payment is not for the purpose the Consumer intended The Reimbursement Rules do not apply to: • civil disputes, such as where a consumer has paid a legitimate supplier for goods or services but has not received them, they are defective in some way, or the consumer is otherwise dissatisfied with the supplier. * *there are other exceptions but they don’t apply to this case. Mr F set up the payments to W and C, in line with the bank account details he was given by W. While I appreciate Mr F’s concerns about the difference between C and C Ltd, the funds were paid to the intended recipient as he used the bank details provided to him. And, if the payment hadn’t gone to the intended recipient, I’m not satisfied that Mr F would’ve been given the car. It’s worth explaining that the only difference between C and C Ltd are the letters “Ltd” at the end of C Ltd’s name. So, I’m satisfied that Mr F paid the intended recipient. There isn’t any evidence that W weren’t a genuine supplier, or that they took Mr F’s funds with a different purpose in mind. Mr F paid for and received a car. So, I’m satisfied that the payments were for purpose Mr F intended. The points that Mr F has raised about the faults with the car, support that he has a civil dispute with W. I’m not satisfied, based on the evidence, that the circumstances under which Mr F made the payments meets the definition of an APP scam as defined by the Reimbursement Rules. So, he wouldn’t be entitled to a refund from Lloyds under these rules. The level of customer service Mr F received from Lloyds Mr F has raised a point about W misleading him and giving misrepresentations about the payment to C/C Ltd. But Lloyds can’t be held liable or asked to make a payment in relation to W’s actions in these circumstances. When Mr F set up C as a new payee, he received a Confirmation of Payee Match. There wasn’t any indication that the payment wasn’t going to the correct payee, so Lloyds wouldn’t have been aware of W’s potential misrepresentation in relation to C/C Ltd. Also, there isn’t an expectation on Lloyds to investigate the beneficiary bank account and its relationship with W. So, I’m not satisfied that Lloyds did anything wrong in relation to the payment Mr F made to C. Mr F has raised a concern regarding Lloyds giving him an answer to his scam claim over the phone, but not providing it in writing in line with the Reimbursement Rules. The Reimbursement Rules say: 4.12 If a Sending PSP assesses that a reported FPS APP scam payment(s) does not satisfy the criteria of a Reimbursable FPS APP scam payment, it must: 1. inform the Consumer in writing that the reported FPS APP scam payment(s) does not satisfy the criteria of a Reimbursable FPS APP scam payment and, to the

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extent permitted by law, provide a summary of the reasons for that decision; and ….. I can’t see that Mr F was promptly provided with a written confirmation of the outcome of his scam claim. The first written confirmation was in October 2025, nearly three months after Mr F raised his scam claim. So, I think Lloyds should’ve provided a better level of service. Lloyds have accepted that they provided incorrect information to Mr F when he was told to visit a branch to raise a DSAR. Also, his request to escalate his scam claim wasn’t actioned in July 2025. Lloyds apologised and said feedback had been given to the staff member’s manager. Ultimately, the DSAR was completed without Mr F having to attend a branch. However, Mr F only raised a DSAR as he thought that was needed to escalate his complaint. Lloyds should’ve explained the correct process for escalating his concerns. I realise that Mr F has suffered a lot of distress and inconvenience in relation to the car purchase and the faults with the car, but I can’t hold Lloyds liable for failings by W. Also, our awards for compensation tend to be modest and aren’t in line with those a court may recommend. Taking into account the level of frustration and inconvenience that would’ve been caused by Lloyds’ poor service, I’m satisfied that it would be fair for Lloyds to pay £150 compensation. In his call with Lloyds Mr F referred to court costs associated with him pursuing W. As Lloyds weren’t liable to refund Mr F under the Reimbursement Rules, he still would have needed to privately pursue W in relation to the car purchase. So, I can’t fairly hold Lloyds liable for any costs associated with his court action. My provisional decision was that I intended to uphold the complaint and ask Lloyds to pay Mr F £150 compensation. Responses to my provisional decision Mr F responded raising a number of points including: • By Lloyds giving him an outcome to his scam claim over the phone when he reported it, it left him with the impression that his claim hadn’t been properly assessed. • Despite Mr F raising his scam claim in July 2025, it wasn’t until October that he got his written response. He had to chase Lloyds on multiple occasions to get updates and feels his complaint wasn’t progressed. • He’s dissatisfied with the way his initial call in July 2025 was handled by Lloyds. He was given incorrect information which materially contributed to his confusion and his need to escalate the complaint. • He has concerns over the information provided as part of the DSAR he raised. • As a result of initial handling and lack of clarity, he spent significant time reviewing regulations, preparing correspondence and escalating the matter to Lloyds and our service. Mr F feels it would be fairer to receive £300 to £350 in compensation. Lloyds didn’t respond to my provisional decision.

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Under the Dispute Resolution Rules (found in the Financial Conduct Authority’s Handbook), DISP 3.5.14, says, if a respondent (in this case Lloyds) fails to comply with a time limit, the ombudsman may proceed with the consideration of the complaint. As the deadline for responses to my provisional decision has expired, I’m going to proceed with issuing my final 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. I’d like to reassure Mr F that I have carefully considered all of the points that he raised in response to my provisional decision. I can confirm that I received a copy of Mr F’s initial call reporting the scam claim, along with multiple other calls he had with Lloyds in relation to his claim. All of these calls were listened to as part of my review of his case and were taken into consideration in reaching my answer. I understand that Mr F may have felt his claim wasn’t given due consideration and investigation, because he was given the outcome during the same call in which he raised his scam claim. However, I don’t think it’s unreasonable for Lloyds to provide an answer straight away, if they were able to assess the information given and apply industry regulations and guidelines. Also, while I appreciate that Mr F didn’t get confirmation in writing until October 2025, he was given a verbal outcome promptly on raising his scam claim. It’s worth highlighting that we reached the same outcome as Lloyds in relation to his payments for the car – that he has a civil dispute with W - and his payments aren’t covered by the Reimbursement Rules. Mr F has raised concerns over information provided to him by Lloyds as part of his DSAR. But this is a new complaint point and hasn’t been raised with Lloyds or considered as part of this complaint. If Mr F has new complaint points, he should contact Lloyds in the first instance, so they have a chance to look into his concerns and address them. All of the points that Mr F has raised, apart from the new complaint point about his DSAR request, were considered as part of my initial review of his case. I listened to the calls he had with Lloyds, considered the level of customer service he received and the impact this had on him. I also took into account the confusion and inconvenience that was caused by Lloyds and the resulting DSAR that Mr F raised, due to not understanding the escalation process. And, as Mr F correctly pointed out, compensation wouldn’t be given for the time that was spent in bringing a complaint to our service or the preparation he may have completed to do so. I’m sorry to disappoint Mr F. But, while he may feel that a higher level of compensation is due, I’m still satisfied that £150 is fair in these circumstances. Putting things right To put things right I require Lloyds Bank PLC to pay Mr F £150 compensation. My final decision My final decision is that I uphold this complaint and require Lloyds Bank PLC to pay Mr F £150.

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Under the rules of the Financial Ombudsman Service, I’m required to ask Mr F to accept or reject my decision before 14 April 2026. Lisa Lowe Ombudsman

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