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

Decision detail

Summary

Mr and Mrs L complained that Nationwide Building Society failed to intervene when they made a £25,000 faster payment to Company A for an investment in September 2024. The investment subsequently underperformed and Company A entered liquidation. Mr and Mrs L argued Nationwide breached its Consumer Duty obligations by failing to provide warnings that would have caused them to reconsider the payment. The ombudsman found that while Nationwide should have intervened given the payment value, intervention would not have prevented the payment on the balance of probabilities. Company A was a legitimate UK incorporated company with professional documentation and no adverse public information, so warnings about investment scams would not have identified concerns about this specific investment. The complaint was not upheld as the matter did not constitute an APP scam under the CRM Code.

The Ombudsman's reasoning

The ombudsman applied the CRM Code definition of an APP scam, which requires that funds were transferred for what the customer believed were legitimate purposes but which were in fact fraudulent. Since all parties agreed Company A was not operating a fraud, the CRM Code did not apply. While Nationwide failed to intervene on a payment of significant value and should have done so, the ombudsman found on the balance of probabilities that intervention would not have prevented the payment. Company A presented no obvious hallmarks of a scam - it was a legitimate UK incorporated company with professional documentation and no adverse public information. Therefore, even if Nationwide had intervened and provided warnings about investment scams, it would not have reasonably identified concerns about this particular investment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website