Upheld: unauthorized transactions / fraud liability complaint against Nationwide Building Society
Financial Ombudsman decision DRN-6215020 of 2026-05-05T00:00:00+00:00. unauthorized transactions / fraud liability complaint against Nationwide Building Society. Outcome: Upheld.
Decision detail
| Reference | DRN-6215020 |
|---|---|
| Decision date | 2026-05-05T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | savings account |
| Claim type | unauthorized transactions / fraud liability |
| Outcome | Upheld |
| Remedy | Refund all disputed transactions to Mr W and pay 8% simple interest per annum from the date of loss until the date of settlement. Nationwide's £100 compensation for inconvenience during investigation was accepted as fair. |
Summary
Mr W complained that Nationwide refused to refund transactions made after his phone was stolen during an assault. The ombudsman found credible evidence that Mr W's phone was stolen (police investigation, device replacement, SIM swap request) and that an unauthorized party accessed his passcode to make a £4,000 transfer and other transactions. Although Mr W stored passcodes on his unlocked phone, the ombudsman determined this was negligent but not grossly negligent under the Payment Services Regulations 2017. Nationwide's audit trail showed passcode login rather than biometric authentication, supporting unauthorized access. The ombudsman upheld the complaint and directed Nationwide to refund the transactions with 8% simple interest.
The Ombudsman's reasoning
The ombudsman applied the Payment Services Regulations 2017, which require refund of unauthorized transactions unless the consumer breached security obligations intentionally or through gross negligence. The ombudsman found Mr W's phone was stolen based on corroborating evidence (police report, device replacement, SIM swap). The audit trail showed passcode login, not biometrics, supporting that an unauthorized party made the transactions. While storing passcodes on a device could be negligent, it did not meet the high threshold of gross negligence because the device was PIN and biometrics protected, and the risk was not obvious and blatant. The ombudsman rejected Nationwide's defense and upheld the complaint.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Nationwide Building Society, all decisions | 13,232 | 21% |
Source
Read the original decision on the Financial Ombudsman Service website