Not upheld: scam reimbursement - failure to intervene complaint against Nationwide Building Society

Decision detail

Summary

Miss A lost £2,740 to a job scam after being convinced by scammers that she needed to pay for 'pre-paid' tasks to obtain employment income. She sent four payments from her Nationwide current account to an existing third-party account in her name, which then forwarded the funds to the scammers. Nationwide refused to reimburse the funds, arguing they had processed authorised payments with no error. The ombudsman found that while Nationwide had a duty to protect customers from fraud, the payments were not sufficiently suspicious to require intervention, being directed to an existing account in Miss A's name. Critically, the ombudsman determined that any warning from Nationwide would have been ineffective because Miss A had already received a clear, specific warning about job scams from another bank the day before but continued making payments, indicating the scammer had such psychological control that no further intervention would have prevented the loss. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the starting legal position that account providers must process authorised payments and customers are responsible for transactions they authorise. While recognising the regulatory requirement for firms to protect customers from fraud, the ombudsman assessed whether the payments were sufficiently suspicious to warrant intervention. The payments, though higher than Miss A's usual spending, were not considered highly suspicious when compared to the volume of daily transactions processed, and were directed to an existing account in her name, reducing risk. Critically, the ombudsman found that even if a written warning had been issued by Nationwide, it would not have prevented further payments because Miss A had already received a clear, specific, tailored written warning about job scams from another bank just one day earlier, yet continued making payments regardless. This demonstrated that the scammer had such psychological control that no further warning would have been effective.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website