Nationwide Building Society · DRN-6100688

The complaint Mr B complains that Nationwide Building Society loaded two fraud markers against his name. He’d like them removed and compensation for the impact. What happened In April 2025 Mr B applied for a current account with Nationwide, initially Mr B’s application was accepted however soon after opening the account was closed. Nationwide issued Mr B with a letter advising him that if he wished to reapply for a further account he’d need to supply evidence of his identity and proof of address. In May 2025 Mr B made a further application but this was again unsuccessful. After both applications Nationwide loaded victim of impersonation markers on Mr B’s record – they thought Mr B had been a victim of identity fraud. Mr B complained to Nationwide; he insisted that he’d made the applications and the victim of impersonation markers had been unfairly loaded. However, Nationwide rejected Mr B’s complaint. They thought they’d acted fairly in carrying out further checks and loading the victim of impersonation markers. Mr B wasn’t satisfied with Nationwide’s response so complained to our service. He added that the markers were making it very difficult for him to obtain financial products. And he queried as his husband also has accounts at Nationwide whether their algorithm might have an LGBT bias. One of our Investigators looked into Mr B’s complaint. They asked Nationwide more questions about their reasons for suspecting fraud and loading the markers. Nationwide explained that the application contained certain elements which they’ve picked up as a known fraud trend. Our Investigator asked Mr B whether he could provide evidence of his identity and proof of address, and on Mr B doing so they shared this with Nationwide. As Nationwide were now satisfied that Mr B made the applications they removed the markers from Mr B’s record. Our Investigator thought that Nationwide’s reasons for suspecting fraud weren’t sufficient, and they didn’t act fairly when loading the victim of impersonation markers. And they thought £75 compensation was fair. Neither Mr B nor Nationwide accepted. Nationwide felt they’d acted fairly in loading the victim of impersonation markers, and Mr B felt that £435 was fairer compensation for the impact on him. He added that the impact of Nationwide’s actions was significant including the closure of the two accounts, removal of his internet banking and loading fraud markers against his name. As neither party agreed the case has been passed to me to decide.

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What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Under the relevant rules a business is entitled to load a victim of impersonation marker when they have reasonable suspicion that an individual’s identity is being misused. The markers have now been removed, but I’ll need to consider whether Nationwide acted fairly when it first loaded them on Mr B’s record. Nationwide have argued that they acted fairly, and within these rules when loading the victim of impersonation markers on Mr B’s record. They’ve shared information with our service arguing that Mr B’s applications showed signs of a ‘known fraud trend’. I’m unable to share exactly why Nationwide believe this to be the case, however, having reviewed their reasons I can’t fairly conclude this was reasonable. Even if I did think Nationwide’s initial concerns that Mr B’s identity had been misused I’d have expected them to contact Mr B and ask him to provide his proof of address or identification before loading the markers – but this didn’t happen. For these reasons I’m satisfied Nationwide acted unfairly in loading the markers, and closing Mr B’s accounts. Mr B’s questioned whether Nationwide’s decision to close his accounts and load the fraud markers is due to an LGBT bias with their algorithm. I understand why Mr B feels this way and although I can’t share Nationwide’s specific concerns with Mr B, I’d like to reassure him that I’ve not seen any evidence that Nationwide’s actions were the result of bias towards him due to his sexuality. I’m also satisfied that Nationwide could have done more when Mr B raised his complaint – Nationwide advised Mr B that they believed the markers should be there so they wouldn’t be removing them. But, if they’d asked Mr B for extra documentation, as was provided when he came to our service, Nationwide would have realised Mr B did make the two applications, and they’d have removed the markers sooner. I’ve moved on to consider the impact of Nationwide’s actions on Mr B. It’s important for me to consider the nature of the markers loaded, and the impact of such markers on a customer. Both the markers Nationwide loaded were for ‘victim of impersonation’. I’m satisfied Nationwide were trying to protect Mr B from potential fraud here. These markers are put in place to protect an individual from fraud, and they do this by warning a business that the individual might be at risk. This might lead a business to carry out additional checks or ask for further identification – but it shouldn’t lead directly to an application being automatically declined. I appreciate that Mr B has recently applied for financial products and been declined but for the reasons I’ve outlined I can’t fairly conclude any challenges Mr B had in obtaining financial products resulted from Nationwide’s actions. Despite this, I do agree Mr B experienced distress and inconvenience from Nationwide’s actions – this includes the closing of the two accounts and the anxiety of the markers being loaded against him. I’ve considered appropriate compensation here and I realise this will disappoint Mr B however due to the short time the accounts were open and the limited negative impact victim of impersonation markers have I’m satisfied that £75 is fair compensation for the distress caused to him my Nationwide’s actions. Putting things right I’ll be directing Nationwide to compensate Mr B £75 for the impact caused to him.

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My final decision My final decision is I uphold this complaint. And direct Nationwide Building Society to: • Pay Mr B £75 compensation for the impact caused to him Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 23 April 2026. Jeff Burch Ombudsman

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