By: Akeem Lopez & M. Glenn Hamel-Smith

Pay­ment Ser­vice Providers (PSPs), which can ei­ther be a bank (bank-PSPs) or a non-bank en­ti­ty (non-bank PSPs), play a sig­nif­i­cant role in the pay­ment ecosys­tem. PSPs con­nect cus­tomers, busi­ness­es, en­tre­pre­neurs, is­su­ing banks (the pay­er’s bank), ac­quir­ing banks (the pay­ee’s bank) and pay­ment net­works (such as LINX, Visa or Mas­ter­card) to fa­cil­i­tate the seam­less set­tle­ment of trans­ac­tions.

With in­creas­ing in­ci­dents of fraud, there has been a grow­ing fo­cus on the oblig­a­tions and du­ties owed by non-bank PSPs to cus­tomers, par­tic­u­lar­ly in in­stances of Au­tho­rised Push Pay­ment (APP) fraud (i.e. a type of fraud where an in­no­cent vic­tim is per­suad­ed to send funds to an ac­count con­trolled by the fraud­ster). In this ar­ti­cle, we dis­cuss re­cent de­vel­op­ments in this area on the heels of a de­ci­sion of the Eng­lish High Court in Ham­blin and Ham­blin v Moor­wand Ltd and RND Ltd [2025] EWHC 817 (Ch) (the Ham­blin case).

The Ham­blin case:

In the Ham­blin case, RND Ltd (RND) was a le­git­i­mate com­pa­ny, du­ly in­cor­po­rat­ed in Eng­land with its main area of busi­ness be­ing on­line mar­ket­ing. Moor­wand Ltd (Moor­wand) was a PSP and Elec­tron­ic Mon­ey In­sti­tu­tion reg­u­lat­ed by the UK’s Fi­nan­cial Con­duct Au­thor­i­ty. Im­por­tant­ly, Moor­wand was not a bank.

In March 2017, a Mr. “Stan­field” reached out to Moor­wand’s busi­ness ac­count man­ag­er to open an ac­count with Moor­wand in RND’s name. In con­duct­ing their dili­gence checks, Moor­wand’s em­ploy­ees not­ed that the re­al John Stan­field (who is record­ed on RND’s fil­ings at Com­pa­nies House) had a dif­fer­ent birth­day, pass­port num­ber and res­i­den­tial ad­dress than that of the Mr. “Stan­field” who was now seek­ing to open an ac­count in RND’s name. De­spite these dis­crep­an­cies, Moor­wand pro­ceed­ed to set up three ac­counts for RND (the ac­counts be­ing de­nom­i­nat­ed in Bit­coin, pound ster­ling and Eu­ro).

Mr. and Mrs. Ham­blin fell vic­tim to an APP fraud where­by they were in­duced to trans­fer £160,000 to one of the ac­counts set up in the name of RND at the re­quest of Mr. “Stan­field” at Moor­wand (the RND ac­count). The Ham­blins were un­der the mis­tak­en be­lief that the mon­eys would be used for in­vest­ment pur­pos­es. These funds were cred­it­ed to the RND Ac­count. Moor­wand then fa­cil­i­tat­ed the set­tle­ment of var­i­ous trans­ac­tions ini­ti­at­ed by Mr. “Stan­field” in­clud­ing the pur­chase of a lux­u­ry watch and var­i­ous trades in Bit­coin (trans­ac­tions which, ac­cord­ing to ex­pert ev­i­dence, are com­mon amongst fraud­sters).

In the Cir­cuit Court, the Ham­blins ini­ti­at­ed pro­ceed­ings against RND and Moor­wand to re­cov­er the lost monies on three grounds: * First­ly, against RND di­rect­ly to re­pay the £160,000; or

* Sec­ond­ly, by a de­riv­a­tive claim against Moor­wand on be­half of RND ar­gu­ing that Moor­wand breached its man­date by deb­it­ing the RND Ac­count even though Moor­wand was put on in­quiry that the pay­ment in­struc­tions were be­ing by made by RND’s agent who was in breach of his du­ty to RND; or

* Third­ly, by a de­riv­a­tive claim against Moor­wand on be­half of RND un­der the Pay­ment Ser­vices Reg­u­la­tions, 2009 on the ba­sis that RND had not ‘con­sent­ed’ to the with­drawals from its ac­count.

The Cir­cuit Court judge dis­missed the ac­tion on all three grounds and the Ham­blins ap­pealed. In de­cid­ing the present ap­peal, the judge re­ferred to the Quince­care du­ty im­posed on banks (a le­gal prin­ci­ple which finds its gen­e­sis in Bar­clays Bank plc v Quince­care Ltd and an­oth­er [1992] 4 All ER 363).

The Quince­care du­ty was fur­ther clar­i­fied re­cent­ly in Philipp v Bar­clays Bank UK plc [2024] 1 All ER (Comm) 1 (Phillips). The judge re­hearsed some of the prin­ci­ples em­a­nat­ing from Phillips (al­so sum­ma­rized in this ar­ti­cle: https://trinidad­law.com/bankers-be­ware-an-up­date-on-the-quince­care-du­ty-to-pro­tect-cus­tomers-from-fraud/).

Fre­quent­ly ap­pear­ing in the line of Quince­care cas­es (and in the present ap­peal) is a sit­u­a­tion where pay­ment in­struc­tions are giv­en by a cus­tomer’s au­tho­rised sig­na­to­ry who is seek­ing to de­fraud the said cus­tomer. In mat­ters such as these, the rel­e­vant prin­ci­ples as stat­ed in Phillips and ref­er­enced by the judge in the Ham­blin Case are as fol­lows:

* The au­thor­i­ty con­ferred on an agent by a cus­tomer of a bank to sign cheques or give oth­er pay­ment in­struc­tions on be­half of the cus­tomer does not in­clude au­thor­i­ty to act dis­hon­est­ly in pur­suit of the agent’s own in­ter­ests and in fraud of the cus­tomer;

* An agent act­ing in this way will there­fore lack ac­tu­al au­thor­i­ty to give the in­struc­tion on be­half of the cus­tomer;

* The agent will still in gen­er­al have ap­par­ent au­thor­i­ty to do so by virtue of the cus­tomer’s rep­re­sen­ta­tion to the bank that the agent is au­tho­rised to give pay­ment in­struc­tions on its be­half (i.e. by be­ing an au­tho­rised sig­na­to­ry);

* How­ev­er, if there are cir­cum­stances ap­par­ent to the bank which sug­gest that the agent is be­ing dis­hon­est, which would cause a rea­son­able banker, be­fore ex­e­cut­ing an in­struc­tion, to make in­quiries to ver­i­fy the agent’s au­thor­i­ty, then the bank has a du­ty to ex­er­cise rea­son­able skill and care in and about ex­e­cut­ing the cus­tomer’s in­struc­tions and, in par­tic­u­lar, the bank is re­quired to make in­quiries to as­cer­tain whether the in­struc­tion giv­en is one ac­tu­al­ly au­tho­rised by the cus­tomer and

If the bank ex­e­cutes the pay­ment in­struc­tion with­out mak­ing such in­quiries, the bank will be in breach of its du­ty and the pay­ment in­struc­tion will not bind the cus­tomer.

The High Court dis­missed the ap­peal on grounds (i) and (iii) set out above but de­cid­ed that the Cir­cuit Court judge wrong­ly dis­posed of the de­rivate claim that Moor­wand breached its man­date by deb­it­ing the RND Ac­count even though Moor­wand was put on in­quiry that the pay­ment in­struc­tions were the re­sult of a fraud.

The High Court rea­soned that the Cir­cuit Judge wrong­ly equat­ed RND’s pur­port­ed agent, Mr. “Stan­field” (i.e. the fraud­ster) with RND it­self. Rather, the Cir­cuit Court judge should have right­ful­ly treat­ed RND as an in­no­cent par­ty be­ing de­fraud­ed by Mr. “Stan­field” (and al­so bear­ing in mind that the re­al John Stan­field was him­self a vic­tim of iden­ti­ty theft by the per­son pos­ing as Mr. “Stan­field”).

The High Court not­ed that there was suf­fi­cient ma­te­r­i­al to sug­gest that Mr. “Stan­field” was not in fact the re­al John Stan­field and that Moor­wand should have right­ful­ly been con­sid­ered to be ‘on in­quiry’ that a fraud was be­ing per­pe­trat­ed.

The High Court, there­fore, dealt with this point on a rolled-up ba­sis, si­mul­ta­ne­ous­ly grant­i­ng per­mis­sion to ap­peal and al­low­ing the ap­peal. Moor­wand was there­fore or­dered to re­store the monies to the RND Ac­count.

The le­gal and reg­u­la­to­ry frame­work in T&T:

Ac­cord­ing to the web­site of the Cen­tral Bank of Trinidad and To­ba­go (the CBTT), there are cur­rent­ly five reg­is­tered non-bank PSPs in Trinidad and To­ba­go (with one cur­rent­ly in the process of de-reg­is­ter­ing).

The CBTT is the pri­ma­ry reg­u­la­tor of lo­cal PSPs. Sec­tion 36(cc) of the Cen­tral Bank Act Chap 79:02 (the Cen­tral Bank Act) gives the CBTT a broad man­date to su­per­vise, among oth­er things, the op­er­a­tions of pay­ment sys­tems in Trinidad & To­ba­go.

In No­vem­ber and De­cem­ber 2012, the CBTT pub­lished four guide­lines aimed at pro­vid­ing the rel­e­vant over­sight and su­per­vi­sion of pay­ment sys­tems. Guide­line No. 3 – Op­er­a­tion of Pay­ment Ser­vice Providers pro­vides that a PSP is li­able for the val­ue of trans­ac­tions where, among oth­er things, a pay­ment trans­ac­tion was unau­tho­rised. In such cir­cum­stances, Guide­line No.3 pro­vides that the PSP should re­fund the unau­tho­rised amount to the pay­er and re­store the pay­er’s ac­count to the state it would have been in if the pay­ment had not been made.

The en­force­abil­i­ty of these guide­lines, how­ev­er, re­main un­clear. For one, the Cen­tral Bank Act does not pro­vide a clear means of en­force­ment for the breach of a guide­line is­sued un­der sec­tion 36(cc).

This is in con­trast with oth­er CBTT-ad­min­is­tered leg­is­la­tion. For ex­am­ple, where there is a breach of a guide­line is­sued by the CBTT un­der sec­tion 10 of the Fi­nan­cial In­sti­tu­tions Act Chap 79:09 (the Fi­nan­cial In­sti­tu­tions Act), the In­spec­tor of Fi­nan­cial In­sti­tu­tions can is­sue a com­pli­ance di­rec­tion as a means of en­force­ment pur­suant to sec­tions 12 and 86 of the Fi­nan­cial In­sti­tu­tions Act.

The un­cer­tain­ty re­gard­ing en­force­abil­i­ty may be one of the rea­sons that the CBTT, in its 2021 Draft Pol­i­cy Pro­pos­al for a Pay­ment Sys­tems Bill, rec­og­nized that “the frame­work for the reg­u­la­tion of [PSPs] needs to be strength­ened sig­nif­i­cant­ly”.

The CBTT fur­ther not­ed that “the broad man­date un­der the [Cen­tral Bank Act] and the Guide­lines is­sued by the [CBTT] there­fore need to be en­hanced by a com­pre­hen­sive piece of leg­is­la­tion in the in­ter­est of le­gal cer­tain­ty and to pro­tect stake­hold­ers’ in­ter­ests”.

Such “a com­pre­hen­sive piece of leg­is­la­tion” may ar­rive soon. Fol­low­ing the 100th meet­ing of the Pay­ments Sys­tem Coun­cil in De­cem­ber 2025, the CBTT high­light­ed that a key fo­cus of that meet­ing was the pro­posed leg­isla­tive re­form to the na­tion­al pay­ment sys­tem (in­clud­ing the in­tro­duc­tion of the Pay­ment Sys­tems and Ser­vices Bill and ac­com­pa­ny­ing reg­u­la­tions).

Look­ing ahead and key con­sid­er­a­tions for lo­cal non-bank PSPs:

Many com­men­ta­tors have ques­tioned whether the Ham­blin Case was right­ful­ly de­cid­ed on the premise that it ex­tends the Quince­care du­ty (tra­di­tion­al­ly ap­plic­a­ble on­ly to banks) to non-bank PSPs and im­pos­es too heavy a bur­den on non-bank PSPs, which may al­ready have statu­to­ry/reg­u­la­to­ry oblig­a­tions to de­fraud­ed cus­tomers.

The na­ture of that bur­den is such that de­fraud­ed cus­tomers may now have two av­enues by which they can seek re­course against non-bank PSPs:

(i) a com­mon law ac­tion claim­ing that the non-bank PSP breached its Quince­care du­ty; or

(ii) a statu­to­ry/reg­u­la­to­ry ac­tion for re­im­burse­ment (where such statu­to­ry/reg­u­la­to­ry pro­vi­sions ex­ist).

This is par­tic­u­lar­ly so for non-bank PSPs in the UK where ex­ten­sive re­forms to the reg­u­la­to­ry frame­work are be­ing pur­sued and im­ple­ment­ed, in­clud­ing the in­tro­duc­tion of a manda­to­ry re­im­burse­ment re­quire­ment for cer­tain in-scope PSPs whose cus­tomers fall vic­tim to APP fraud.

With­out much sur­prise to some, the Ham­blin Case has been ap­pealed and a sta­tus hear­ing date has been sched­uled for mid-2026 (as of the date of this ar­ti­cle).

Giv­en the pos­si­ble far-reach­ing im­pli­ca­tions of these de­vel­op­ments, it would be in­cum­bent on lo­cal non-bank PSPs to mon­i­tor this space on two fronts: (i) the out­come of the ap­peal in the Ham­blin Case and (ii) the (po­ten­tial) in­tro­duc­tion and pas­sage of the pro­posed Pay­ment Sys­tems and Ser­vices Bill and ac­com­pa­ny­ing reg­u­la­tions, as sig­nalled by the CBTT.

Akeem Lopez is an As­so­ciate and M. Glenn Hamel-Smith is a Part­ner and Head of Bank­ing & Fi­nance at M. Hamel-Smith & Co. They can be reached at mhs@trinidad­law.com.

Dis­claimer: This col­umn con­tains gen­er­al in­for­ma­tion on le­gal top­ics and does not con­sti­tute le­gal ad­vice.