Not upheld: scam liability - bank impersonation fraud complaint against Nationwide Building Society

Decision detail

Summary

Ms G was victim of a bank impersonation scam and made an authorised payment of £983.36 by debit card to a foreign exchange business. She sought refund from Nationwide Building Society, which declined citing that debit card transactions are not covered by mandatory scam reimbursement rules. The investigator upheld the complaint, but the ombudsman disagreed. The ombudsman found that while Nationwide must monitor for fraud, the first payment lacked sufficiently suspicious characteristics to warrant intervention - it was not exceptionally high value, went to a legitimate merchant, and did not drain the account. The second payment's blocking demonstrated Nationwide's systems correctly identified the pattern of rapid repetition. The ombudsman declined to hold Nationwide liable and did not order a refund, though noted Nationwide must now make reasonable adjustments given Ms G's known vulnerability.

The Ombudsman's reasoning

While Nationwide has obligations to monitor accounts and detect fraud, there must be a balance to avoid disrupting legitimate payments. Payment 1 was not sufficiently unusual to warrant intervention - it was not high value in context of all payments processed, was to a reputable merchant, and did not drain the account. Although higher than Ms G's typical transactions, occasional higher value payments are common. The payment appeared as a legitimate instruction from an authorised device using biometrics. Payment 2's blocking demonstrates Nationwide's systems worked correctly by detecting the pattern of repetition in rapid succession, which was the appropriate intervention point. A chargeback claim would have had no prospect of success as there was no dispute with the merchant and it had provided the service sold.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website