Upheld: unauthorised transactions / fraud liability complaint against Nationwide Building Society

Decision detail

Summary

Mr K and Mrs K complained that Nationwide Building Society incorrectly held them liable for two unauthorised payments totalling £2,853.50 to merchant T in July 2025. Nationwide raised a chargeback which was unsuccessful based on merchant evidence, but the ombudsman found this evidence unreliable due to cost discrepancies, non-existent merchant website, non-local IP address, and lack of delivery proof. The ombudsman was persuaded the transactions were fraudulent, particularly given that Mrs K's son experienced identical fraudulent transactions on the same date that were refunded by his bank. The ombudsman upheld the complaint, ordering Nationwide to refund the amount plus 8% interest and pay £200 compensation for poor complaint handling.

The Ombudsman's reasoning

The ombudsman found that while the transactions were properly authenticated using token S, authentication alone is insufficient to establish consumer liability for distance contracts. The burden is on the bank to prove the consumer consented to the payment. The merchant evidence was unreliable because: (1) the wood stove cost exceeded the disputed amounts; (2) the individual chargeback amounts did not align with the invoice; (3) the IP address was not local to Mrs K; (4) the merchant's website does not exist; (5) no evidence of delivery was provided; and (6) similar fraudulent transactions occurred on Mrs K's son's account on the same date. The previous use of token S in 2023 did not establish a genuine relationship because that was a contactless terminal payment where card details are stored differently than online transactions. The ombudsman was satisfied Mrs K did not authorise the transactions and that Nationwide failed to act fairly in holding her liable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website