Not upheld: Fraud reimbursement (APP scams) complaint against Nationwide Building Society

Decision detail

Summary

Mr M complained that Nationwide failed to refund losses from an APP scam where he transferred funds from his Nationwide account to his own accounts with Bank R and Bank S, which were subsequently moved to a cryptocurrency exchange and stolen. Although Nationwide provided some warnings and blocked certain payments, Mr M argued better intervention would have prevented the loss. The ombudsman found that while Nationwide's intervention could have been better and the firm should have identified suspicious transaction patterns, it was not more likely than not that proportionate intervention would have prevented the scam. The scam was highly sophisticated, Mr M was extensively coached and manipulated by scammers over approximately 20 hours of calls, and he genuinely believed he was protecting his funds as part of a legitimate investigation. The complaint was not upheld, and Nationwide's £50 compensation for providing incorrect information was deemed appropriate.

The Ombudsman's reasoning

While good industry practice required Nationwide to identify suspicious transactions and warn Mr M, and the ombudsman found Nationwide's intervention could have been better, the key issue was whether proportionate intervention would more likely than not have prevented the loss. The ombudsman concluded it would not, based on: (1) the sophistication and plausibility of the scam; (2) Mr M's genuine belief he was acting legitimately to protect his funds; (3) the scammers' extensive manipulation and coaching of Mr M over 20 hours of calls; (4) Mr M's pre-conditioning to expect and distrust warnings; (5) Mr M's demonstrated willingness to circumvent bank restrictions; and (6) lack of evidence that Mr M had doubts about his actions until after the final payment. The ombudsman also noted the Faster Payment Scheme Reimbursement Rules did not apply because funds were sent to accounts Mr M controlled, not directly to scammers.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website