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

Decision detail

Summary

Mr W lost his phone and was deceived by a scammer posing as a police officer into disclosing his phone passcode, which contained his banking app passcode. Two unauthorised transactions totalling approximately £3,000 were made from his account. The ombudsman found the transactions were unauthorised but applied the Payment Services Regulations 2017 to determine liability. For the first transaction of £2,210 at 3:21pm, Mr W was not grossly negligent as he was still at the police station and reasonably believed his phone might be at another station. For the second transaction of £1,000 at 6:58pm, Mr W was grossly negligent by delaying notification to Nationwide for over two hours after discovering his other bank account had been compromised at 5pm, despite police advice to contact his bank. The ombudsman upheld the complaint and ordered refund of the first transaction with interest, but not the second.

The Ombudsman's reasoning

The ombudsman found the transactions were unauthorised as Mr W did not intend to authorise them when he shared his phone passcode under social engineering. However, liability under the Payment Services Regulations 2017 depends on whether Mr W was grossly negligent. For the first transaction at 3:21pm, Mr W was not grossly negligent because he was still at the police station and had not yet become aware his phone was truly lost - he reasonably believed it might be at another police station. For the second transaction at 6:58pm, Mr W was grossly negligent because by 5pm he knew his other bank account had been compromised, demonstrating his phone was misappropriated, yet he delayed notifying Nationwide for over two hours despite police advice to contact his bank immediately. The ombudsman found Nationwide did not act unfairly in failing to detect the transactions as suspicious or in its recovery attempts.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website