Upheld: authorised push payment (APP) scam - investment fraud complaint against Nationwide Building Society
Financial Ombudsman decision DRN-6252642 of 2026-05-15T00:00:00+00:00. authorised push payment (APP) scam - investment fraud complaint against Nationwide Building Society. Outcome: Upheld.
Decision detail
| Reference | DRN-6252642 |
|---|---|
| Decision date | 2026-05-15T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | investment |
| Claim type | authorised push payment (APP) scam - investment fraud |
| Outcome | Upheld |
| Remedy | Nationwide Building Society must: (1) refund Mrs P's outstanding loss of £10,410; (2) pay 8% simple interest per annum on the refund from 2 February 2026 until the date of settlement; (3) if required by HMRC, deduct income tax from the interest and provide a tax deduction certificate; (4) optionally take an assignment of rights to all future distributions to Mrs P from ongoing investigations to avoid double recovery, subject to providing Mrs P with a draft assignment for her consideration and agreement first. |
Summary
Mrs P invested £15,100 in a rent-to-rent property investment scheme with Company S in March 2024, receiving seven monthly returns before Company S directors were arrested in January 2025 and the company entered liquidation in July 2025. Mrs P claimed the investment was an authorised push payment (APP) scam and sought reimbursement of her £10,410 outstanding loss from Nationwide Building Society. The ombudsman upheld the complaint, finding that Company S was operating a fraudulent scheme based on evidence that it sold investments without actual property agreements, passed two-thirds of funds to another suspected scam, and paid returns using investor funds rather than legitimate profits (Ponzi scheme characteristics). The ombudsman rejected Nationwide's arguments to await external investigations and concluded Mrs P had a reasonable basis to believe Company S was legitimate. Nationwide was ordered to reimburse Mrs P £10,410 plus 8% simple interest from 2 February 2026 until settlement.
The Ombudsman's reasoning
The ombudsman concluded that on the balance of probabilities, Company S was operating a fraudulent scheme rather than a failed legitimate investment. While each individual piece of evidence may not be sufficient alone, collectively they demonstrate Company S intended to scam investors. Key evidence included: Company S sold investments without actual agreements to rent properties, sold investments in unbuilt or unsuitable properties, passed two-thirds of funds to another suspected scam (Company C), and paid returns to investors using other investors' funds (Ponzi scheme characteristics) rather than legitimate profits. The ombudsman rejected Nationwide's arguments that the matter should await external investigations, finding sufficient evidence already available to reach a fair decision. The use of a solicitor as an intermediary did not prevent the CRM Code from applying, as the solicitor was acting for Company S, not Mrs P. Mrs P had a reasonable basis to believe Company S was legitimate given its Companies House registration, professional appearance, positive reviews from other investors, and use of a regulated solicitor. No effective warning was provided by Nationwide.
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