7 Shocking Failures That Cost Nationwide £44 Million

Nationwide fined £44M after major financial crime detection failures. Discover 7 shocking system flaws that let millions in fraud slip through unnoticed.

sarah

Dec 12, 2025 - 19:28

7 Shocking Failures That Cost Nationwide £44 Million

Nationwide has been fined £44 million for failing to have adequate financial crime detection processes between 2016 and 2021.

The Financial Conduct Authority (FCA) stated that the building society had "ineffective systems" for assessing the risk of its customers and monitoring their transactions.

In one case, Nationwide missed opportunities to identify unusual activity after fraudulent COVID furlough payments worth £26 million were deposited into a personal account within just eight days.

Nationwide stated that it fully cooperated with the regulator's investigation and invested in its crime control systems since 2021 to ensure they were "robust."

Nationwide did not provide business accounts during this period.

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The FCA stated that although the building society was aware that some customers were using personal accounts for business activities, it lacked accurate information about who posed a greater risk of financial crime.

This led to inadequate monitoring of money laundering risks, it said. The customer who deposited the illegal furlough payments into the bank received £27.3 million over 13 months. Most, but not all, of the money has since been recovered by the tax authority.

The FCA stated that Nationwide's controls should have led to a more prompt review of this unusual activity.

The government provided furlough or Job Retention Scheme (JRS) funds to support firms during the COVID pandemic. The FCA stated that the receipt of JRS funds was a strong indication that the account was being used for business purposes.

In total, £64 million of JRS funds were deposited into more than 5,000 personal accounts at Nationwide, it said.

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Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, said, "Nationwide failed to properly understand the financial crime risk lurking within its customer base."

She said, "It took too long to address its flawed systems and weak controls, which meant red flags were overlooked, leading to serious consequences." Nationwide said it had identified deficiencies through its review and brought them to the FCA's attention.

A spokesperson said, "We regret that our controls fell below the high standards we expect during this period."

"Since 2021, Nationwide has invested significantly in all aspects of its economic crime control framework to ensure our systems are robust.

He added, "We do not believe any of our customers have suffered financial loss as a result of these control issues and we remain committed to preventing economic crime and protecting our customers and the wider UK economy from fraud."

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