Not upheld: scam - failure to prevent payment / failure to recover funds complaint against Nationwide Building Society

Decision detail

Summary

Mr L lost £435 to an investment scam after being persuaded to make a card payment to unfreeze a supposedly valuable investment account. He requested a refund from Nationwide Building Society, which declined on the basis that he had authorised the payment. The ombudsman did not uphold the complaint, finding that the payment amount and characteristics were not suspicious enough to require Nationwide to intervene, and that recovery attempts would likely have been unsuccessful. While sympathising with Mr L's loss, the ombudsman concluded it would not be fair to require Nationwide to refund the payment.

The Ombudsman's reasoning

The ombudsman applied the principle that customers are presumed liable for authorised payments under PSRs 2017. While banks should monitor for fraud and unusual transactions, there must be a balance between intervention and not disrupting legitimate payments. The £435 payment was not of a value or nature that should have triggered concern, and did not exhibit common scam characteristics. Recovery options (Section 75 and chargeback) would likely have been unsuccessful as the payment may have been received by a genuine entity. The Contingent Reimbursement Model Code does not apply to card payments.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website