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

Decision detail

Summary

Mr P lost over £40,000 to a fraudulent crypto trading scheme (B) through approximately 30 card payments to Nationwide between February and August 2021. Nationwide refunded 50% of payments made after the FCA warning on 23 March 2021. The ombudsman found that while Nationwide should have intervened on two larger payments in early March, such intervention would not have prevented the scam as B appeared legitimate with no publicly available evidence of fraud. The ombudsman upheld Nationwide's 50% refund as appropriate, finding Mr P contributed to his loss by investing £40,000 in a scheme promising unrealistic daily returns without attempting withdrawals. The complaint was not upheld.

The Ombudsman's reasoning

While Nationwide should have intervened on the two larger payments in early March 2021 based on good industry practice regarding unusual transactions, such intervention would not have prevented the scam because B appeared legitimate and there was no publicly available evidence of fraud at that time. After the FCA warning, the 50% refund already provided is appropriate because Mr P contributed to his loss by sending £40,000 to a crypto firm promising unrealistic returns without attempting withdrawals. Card payments fall outside the Contingent Reimbursement Model, and chargebacks would not succeed as Mr P received what he paid for (crypto transfer services).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website