Lloyds Banking Group has refused to reimburse victims of the alleged £160 million Godwin Capital scheme, which insolvency practitioners describe as a Ponzi scheme, on the basis that it regards the payments as a legitimate investment rather than a scam. Under the mandatory rules in force since October 2024, banks must refund authorised push payment fraud, but not investment losses.
TL;DR · LAST REVIEWED 1 SEPTEMBER 2026
- Lloyds has refused to reimburse victims of the alleged £160 million Godwin Capital scheme.
- It regards the payments as a legitimate investment, so the fraud reimbursement rules do not apply.
- Mandatory reimbursement covers authorised push payment scams, not investment losses.
Mandatory APP fraud reimbursement at a glance
| Rule | Detail |
| In force since | 7 October 2024 |
| Covers | Authorised push payment scams via Faster Payments and CHAPS |
| Maximum refund | £85,000 per claim |
| Cost split | 50 per cent sending bank, 50 per cent receiving bank |
| Does not cover | Investment losses, civil disputes and payments between your own accounts |
| Report within | 13 months of the last payment |
Source: Payment Systems Regulator rules, from October 2024
KEY FACTS
- Lloyds has refused to reimburse victims of the alleged £160 million Godwin Capital scheme (reported August 2026).
- Insolvency practitioners have launched a £155 million claim against the directors alleging fraudulent trading; the allegations are unproven and the directors have not commented.
- Mandatory APP fraud reimbursement began on 7 October 2024, capped at £85,000 per claim.
- The rules cover authorised push payment scams but not investment losses or civil disputes.
- A customer refused reimbursement can escalate the complaint to the Financial Ombudsman Service.
What Lloyds has decided
Lloyds Banking Group has declined to reimburse investors who lost money in Godwin Capital, an operation that insolvency practitioners allege was a Ponzi scheme worth around £160 million. According to reports, the bank told at least one investor it can't consider this was a scam, treating the money as a legitimate investment that does not meet the criteria for mandatory fraud reimbursement. Insolvency practitioners have launched a £155 million claim against the directors alleging fraudulent trading, mismanagement and breach of duty. Those allegations are unproven, the directors have not publicly commented, and investors are reported to have been offered only pennies in the pound.
How the reimbursement rules work
Since 7 October 2024 the Payment Systems Regulator has required banks to reimburse victims of authorised push payment fraud, where someone is deceived into sending money to a fraudster. Claims are capped at £85,000, the cost is split equally between the sending and receiving bank, and the scam must be reported within 13 months. The rules apply to Faster Payments and CHAPS transfers between UK accounts. They deliberately exclude payments between a person's own accounts and civil disputes, and this is the exclusion Lloyds is relying on.
When an investment loss is not a scam
The case turns on a distinction that decides whether victims are repaid: an authorised push payment scam is a deception into paying a criminal, whereas an investment that fails, even badly, is treated as a commercial loss outside the reimbursement rules. Where a business was genuinely trading before it collapsed, banks can argue the money was invested as intended. Consumer advocates counter that calling something an investment should not become a way to avoid the question of fraud. A customer who disagrees with a bank's decision can complain to the Financial Ombudsman Service, which can order reimbursement if it finds the bank acted unfairly.
RELATED GUIDES
DISCLAIMER
This article is editorial information, not financial advice. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Figures were correct at the last review date shown above; verify current rates and rules with the primary sources listed below before acting.
Frequently asked questions
Will Lloyds reimburse Godwin Capital investors
Lloyds has refused, treating the payments as a legitimate investment rather than an authorised push payment scam, so it says the mandatory reimbursement rules do not apply. Affected investors can complain to the Financial Ombudsman.
What is the APP fraud reimbursement scheme
Since 7 October 2024 banks must reimburse victims of authorised push payment fraud, where a person is deceived into sending money to a fraudster, up to £85,000 per claim, with the cost split between the sending and receiving bank.
Does reimbursement cover investment losses
No. The rules cover scams where you are tricked into paying a fraudster, not investments that fail or civil disputes. This distinction is central to the Godwin Capital case.
How long do I have to claim
You must report an authorised push payment scam within 13 months of the last payment for the mandatory reimbursement rules to apply.
What can I do if my bank refuses to refund me
You can complain to the Financial Ombudsman Service, which reviews the case independently and can order the bank to reimburse you if it finds the bank acted unfairly or the payment met the scam criteria.
SOURCES
- FCA: getting your money back after a scam – accessed 1 September 2026
- Financial Ombudsman: fraud and scams – accessed 1 September 2026
