Nationwide Building Society · DRN-6253687

The complaint Miss D complains Nationwide Building Society is holding her liable for money she lost due to the actions of a fraudster. What happened The details of this complaint are well-known to both parties, so rather than repeat them all here I’ve summarised the events key to my determination. An individual I’ll refer to as S, who was a neighbour of Miss D, claimed he would help her purchase a property by helping her raise funds as well as gifting her a significant sum. Unfortunately, S was a fraudster. S claimed to own an investment business and provided a fake investment contract to Miss D. On this basis, she transferred £2,700 (payment one) from her Nationwide account to an account he controlled in July 2021. Shortly after, S persuaded Miss D to let him use her Nationwide credit card to buy items, on the understanding S would repay her and would be selling these items to generate her a profit (payments two-sixteen). In August 2021, S also used her card details to make a further £1,000 payment (payment seventeen). When Miss D realised S had been acting fraudulently, she complained to Nationwide that it shouldn’t hold her liable for these payments. It didn’t agree. Miss D re-raised her concerns when S was subsequently convicted for defrauding her (and others). While Nationwide maintained its position, it ultimately consented to our service considering her complaint. Our investigator concluded Nationwide should refund Miss D for payment one under the terms of the Contingent Reimbursement Model (CRM) code, and for payment seventeen due to it being unauthorised. But he concluded Nationwide could hold Miss D liable for payments two-sixteen due to her sharing her card and security information with S. Nationwide accepted this outcome but Miss D appealed. In summary, she says S’s conviction and her vulnerability haven’t been properly considered, and that the regulations have been misapplied to treat the remaining card payments as authorised – and the account use also looked unusual. 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. Having done so, I consider the investigator’s proposal that Nationwide should refund Miss D £3,700 (plus interest) to be a fair way to resolve this complaint. I don’t think Nationwide can fairly be held liable for the additional payments made on Miss D’s card, nor do I think it ought to pay more to otherwise compensate her for what happened.

-- 1 of 3 --

In explaining my decision, I’m conscious Miss D has provided detailed submissions about this complaint. I want to highlight that, while I have carefully considered everything that has been submitted, my decision is focussed on the points I consider key to my determination – meaning not all information provided will be cited or commented on. Nationwide has agreed to refund payment one, so I won’t dwell on this point as it’s no longer in dispute. But in brief, I do consider it fair that Nationwide should refund this payment under the terms of the CRM code. It seems clear that the circumstances in which Miss D made this payment would meet the code’s definition of a scam, and Nationwide hasn’t shown any exceptions to reimbursement could fairly be applied. The dispute on the remaining payments – made by credit card – is whether they were authorised. The relevant law here is the Consumer Credit Act 1974 (CCA). Under section 83 of the CCA, a debtor isn’t liable for loss arising from use of their credit facility by someone not acting (or treated as acting) as their agent. But, section 84 clarifies that: (2) Section 83 does not prevent the debtor under a credit-token agreement from being made liable to any extent for loss to the creditor from use of the credit-token by a person who acquired possession of it with the debtor's consent. I’ve considered what Miss D has said about her vulnerabilities, and how she was tricked and coerced by S. However, looking at payments two-sixteen, I do consider it clear these were made due to Miss D giving S her credit token (i.e. her card – as well as her PIN) for him to use. Miss D says the card wasn’t gained through “valid” consent, and has referred to comments made by the judge sentencing S. But the matter of whether S coerced Miss D, and committed any fraud offences, is not the same test as whether Nationwide holds liability for that loss. For example, even when payments are made due to scams involving criminal deception, firms are generally not liable under the CCA or the Payment Services Regulations 2017 (PSRs). I’d also point out that, contrary to what Miss D has asserted, “consent” under the PSRs isn’t a matter of informed – but of what payment steps were followed. In all the circumstances, I consider that Miss D consented to let S use her credit card by giving him her card and PIN – even though she was tricked about the overall premise of what he would be doing. The messages from the time make clear that she was aware he would be using her card to make purchases. I therefore consider it fair for Nationwide to hold Miss D liable for these payments under the terms of the CCA. This is based on my own, independent review of Nationwide’s liability here, which isn’t affected by whether other firms may have acted differently in similar circumstances. However, Nationwide has agreed to refund payment seventeen (also made via credit card). This was made some time later, and it does appear likely that S made it using card details which he had deceptively retained from when Miss D had allowed him to use her credit card (and which had since been returned). In those circumstances, I think it’s fair to treat this payment as unauthorised – and for Nationwide to therefore be held liable for the resultant loss. For payments two-sixteen, while the starting position is that Nationwide can treat these as authorised and hold Miss D liable, I have considered whether there are any other grounds for holding Nationwide liable instead. That is because it is clear she has ultimately lost out from these payments due to being tricked by S.

-- 2 of 3 --

However, unlike the authorised transfer, no reimbursement schemes apply to these credit card payments. And while I would also expect Nationwide to be on the look-out for account activity presenting a heightened risk of fraud, I’m not persuaded the risk would have been apparent to Nationwide here. In thinking about the value and volume of payments it processes, I don’t think the payments looked so significantly out of character for how Miss D might be expected to use her credit card that it was remiss of Nationwide to process the payments without completing further checks. In any event, as (at the time) Miss D had agreed for S to use her credit card, it’s unclear to me that any additional checks would have prevented her loss. S was operating a sophisticated deception that wouldn’t have been easy for Nationwide to deduce based on the credit card payments. The fact these payments were being confirmed via chip and PIN did also, in my view, make it less obvious to Nationwide that they might be the result of fraud. I agree with the investigator that there wouldn’t have been grounds to recover these payments either, as it’s not alleged the merchants were at fault here (such as by failing to provide the expected goods/services they were contracted for in exchange for the payments). I do appreciate Miss D was vulnerable and that S manipulated her. This was clearly a cruel and sophisticated deception. However, in considering Nationwide’s role here, I’m not persuaded Miss D’s vulnerability gives rise to expect Nationwide to take further liability for her loss – bearing in mind the key considerations which I have laid out above. Overall, I consider it fair for Nationwide to refund the £2,700 transfer and the £1,000 card payment. In respect of the time taken to agree to the claim, I’m satisfied the interest award Nationwide has agreed to pay for the time Miss D was deprived of funds fairly compensates for this, and I’m not persuaded it is liable for further, foreseeable costs. While the impact of S’s actions here clearly took a significant toll, what I’m looking at is the fault/responsibility Nationwide holds. And I think that liability is limited to these two payments. My final decision For the reasons give above, my final decision is that Nationwide Building Society should take the following action to resolve this complaint: • Refund Miss D £2,700 for payment one, and pay 8% simple interest per year on this amount from the date it declined Miss D’s claim regarding this payment (or, if sooner, fifteen days after she disputed this payment) to the date of settlement (less any tax properly deductible); and • Refund Miss D £1,000 for payment seventeen. It should also rework the credit card account so that any interest or charges caused by this payment are refunded. And it should pay 8% simple interest on an any sums repaid towards the credit card balance arising from this payment, from the date this was repaid to the date of settlement (less any tax properly deductible); Under the rules of the Financial Ombudsman Service, I’m required to ask Miss D to accept or reject my decision before 24 April 2026. Rachel Loughlin Ombudsman

-- 3 of 3 --