Upheld: Fraud reimbursement (APP scams) complaint against Nationwide Building Society

Decision detail

Summary

Mr and Mrs S complained that Nationwide Building Society failed to refund unauthorized transactions made after Mrs S's online passwords were compromised. Nationwide initially refunded the amounts in line with Payment Services Regulations, but later rejected the fraud claim and re-debited the account. The ombudsman found the transactions were unauthorized based on the timing of password compromise notifications, early morning transactions without additional authentication, and merchant confirmations of fraud. The ombudsman criticized Nationwide for relying on merchant evidence rather than their customers and failing to recognize a common fraud pattern. Nationwide was instructed to refund £76.49 plus 8% interest and pay £50 compensation for distress.

The Ombudsman's reasoning

The ombudsman found that the balance of probabilities supported that the transactions were unauthorized based on: the timing of password compromise notifications matching the disputed transactions; Mrs S's inability to provide additional authentication as she was asleep; the illogical nature of Nationwide's suggestion that Mrs S made the transactions herself but failed to provide authentication; and merchant confirmations of fraud. The ombudsman criticized Nationwide for relying wholly on merchant evidence rather than their own customers and for failing to recognize the common fraud pattern of using compromised card details with delivery to the legitimate customer's address.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website