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

Decision detail

Summary

Mr J, a widowed elderly man, fell victim to a sophisticated inheritance scam over several years, making six international payments totalling £103,143.40 from his joint Nationwide account. The scammers convinced him he would inherit $25 million from a deceased uncle but needed to pay half upfront for various fees. Despite being warned by family and friends and having previously reported the scam to another bank, Mr J continued making payments after being shown cash in person and manipulated into believing the scheme was legitimate. Nationwide refunded £61,405.11 but refused to refund the remaining £41,738.29. The ombudsman found that while Nationwide should have intervened with warnings and questioning on certain payments, the scammers' psychological control over Mr J was so strong that such intervention would not have prevented the loss, and Mr J bore 50% contributory responsibility for failing to question obvious red flags.

The Ombudsman's reasoning

The ombudsman applied a two-stage test: (1) whether Nationwide should have intervened proportionately, and (2) crucially, whether such intervention would have prevented the loss (causation). While the ombudsman found Nationwide should have provided a tailored warning for the first payment and human intervention for subsequent payments, the ombudsman concluded that the scammers had such significant control over Mr J that he would have withheld the true purpose, provided plausible cover stories, and likely made alternative payments anyway. This was evidenced by Mr J's willingness to continue payments after reporting the scam to another bank, ignoring warnings from family and friends, and meeting scammers in person. The ombudsman also found Mr J bore contributory responsibility (50%) for failing to question obvious red flags: the $25 million inheritance being 'too good to be true', the illogical requirement to pay half upfront, the unusual cash presentation, and being instructed to mislead his banks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website