Upheld: Authorised Push Payment (APP) scam - investment fraud complaint against Nationwide Building Society
Financial Ombudsman decision DRN-6335285 of 2026-05-21T00:00:00+00:00. Authorised Push Payment (APP) scam - investment fraud complaint against Nationwide Building Society. Outcome: Upheld.
Decision detail
| Reference | DRN-6335285 |
|---|---|
| Decision date | 2026-05-21T00:00:00+00:00 |
| Firm | Nationwide Building Society |
| Product | investment product (rent-to-rent agreement) |
| Claim type | Authorised Push Payment (APP) scam - investment fraud |
| Outcome | Upheld |
| Remedy | Nationwide Building Society must: (1) refund Mr H's outstanding loss of £15,150; (2) pay 8% simple interest per annum on the refund from 5 March 2026 until settlement; (3) provide tax deduction certificate if HMRC income tax is deducted from interest; (4) optionally take assignment of rights to future distributions from ongoing investigations to avoid double recovery, subject to providing Mr H with draft assignment for agreement. |
Summary
Mr H invested £15,850 in a rent-to-rent property investment scheme with Company S in September 2024, making payment via a solicitor. After receiving one return payment, Company S's directors were arrested in January 2025 and the company entered liquidation in July 2025. Mr H claimed reimbursement from Nationwide under the CRM Code, arguing he was victim of an APP scam. The ombudsman upheld the complaint, finding that Company S was operating a fraudulent Ponzi scheme, evidenced by selling investments without underlying property agreements, transferring most funds to another likely scam, and paying returns from investor funds rather than legitimate profit. Although Mr H had a reasonable basis for believing Company S was legitimate based on his due diligence checks and the professional appearance of the scheme, the collective evidence demonstrated fraudulent intent. Nationwide was directed to reimburse £15,150 plus 8% interest from 5 March 2026.
The Ombudsman's reasoning
The ombudsman concluded that on the balance of probabilities, Company S was operating a fraudulent investment scam rather than a failed legitimate investment. While each individual piece of evidence may not be sufficient alone, collectively they demonstrated Company S intended to scam investors: it sold investments without underlying property agreements, in unsuitable or unbuilt properties, transferred most funds to another likely scam (Company C), and paid returns from investor funds rather than legitimate profit (Ponzi scheme characteristics). The ombudsman was satisfied sufficient evidence existed to determine the complaint without waiting for external investigations. The use of a solicitor as an intermediary did not prevent the CRM Code from applying, as the solicitor was acting as a conduit for Company S, not as Mr H's agent. Mr H had a reasonable basis for believing Company S was legitimate given his due diligence checks, the professional appearance of documentation, involvement of an SRA-regulated solicitor, and positive reviews from other investors. The scam warning provided by Nationwide was not an 'Effective Warning' under the CRM Code as it did not address the specific features of investment scams and would not have prevented the scam given Mr H's circumstances.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Nationwide Building Society, all decisions | 13,251 | 21% |
Source
Read the original decision on the Financial Ombudsman Service website