Nationwide Fined £44m Over 'Weak' Financial Crime Controls
The UK's banking regulator, the Financial Conduct Authority (FCA), has slapped Nationwide with a whopping £44m fine over its "weak" financial crime controls. The building society has been left reeling after it failed to catch a customer using personal accounts for business activity, ultimately resulting in a serious case of Covid fraud that cost UK taxpayers £800,000.
According to the FCA, Nationwide's lax controls led to a series of missed red flags, including a customer who tried to apply for numerous current accounts and credit cards under different names and addresses. The regulator found that the lender was aware of these suspicious activities as early as 2014 but failed to act on them, allowing the fraudster to carry out a £27.3m scam over 13 months.
The FCA's investigation revealed that Nationwide's lack of proper systems and controls allowed the customer to receive 24 fraudulent Covid furlough payments in just eight days, with approximately £26m deposited during this period. While HM Revenue and Customs has managed to claw back most of the funds, around £800,000 remains unrecovered.
Therese Chambers, a joint executive director at the FCA, stated that Nationwide's failures were "a serious breach" of its financial crime controls, which "allowed red flags to be missed with devastating consequences." The regulator emphasized that building societies and banks have a key role to play in the fight against financial crime and must remain vigilant.
Nationwide has been working on improving its economic crime control framework since 2021, but the FCA's fine suggests that more work needs to be done. The building society apologized for falling below high standards and committed to preventing economic crime and protecting customers.
The controversy surrounding Nationwide's CEO, Debbie Crosbie, who was appointed after the rival Virgin Money takeover, has also raised eyebrows. Crosbie's £7m annual pay package has been criticized as "obscenely high" and hypocritical by some members of the mutual.
The UK's banking regulator, the Financial Conduct Authority (FCA), has slapped Nationwide with a whopping £44m fine over its "weak" financial crime controls. The building society has been left reeling after it failed to catch a customer using personal accounts for business activity, ultimately resulting in a serious case of Covid fraud that cost UK taxpayers £800,000.
According to the FCA, Nationwide's lax controls led to a series of missed red flags, including a customer who tried to apply for numerous current accounts and credit cards under different names and addresses. The regulator found that the lender was aware of these suspicious activities as early as 2014 but failed to act on them, allowing the fraudster to carry out a £27.3m scam over 13 months.
The FCA's investigation revealed that Nationwide's lack of proper systems and controls allowed the customer to receive 24 fraudulent Covid furlough payments in just eight days, with approximately £26m deposited during this period. While HM Revenue and Customs has managed to claw back most of the funds, around £800,000 remains unrecovered.
Therese Chambers, a joint executive director at the FCA, stated that Nationwide's failures were "a serious breach" of its financial crime controls, which "allowed red flags to be missed with devastating consequences." The regulator emphasized that building societies and banks have a key role to play in the fight against financial crime and must remain vigilant.
Nationwide has been working on improving its economic crime control framework since 2021, but the FCA's fine suggests that more work needs to be done. The building society apologized for falling below high standards and committed to preventing economic crime and protecting customers.
The controversy surrounding Nationwide's CEO, Debbie Crosbie, who was appointed after the rival Virgin Money takeover, has also raised eyebrows. Crosbie's £7m annual pay package has been criticized as "obscenely high" and hypocritical by some members of the mutual.
I mean come on, how do u miss 24 fraudulent payments in just 8 days? That's like, total negligence! The FCA is right to call it out and the fact that they knew about these suspicious activities as far back as 2014 is just sickening. And now Debbie Crosbie's face is getting burned too over her obscene pay package 
The mutual needs to step up its game ASAP or else customers will keep losin trust in 'em 
I mean, come on! £44m is a crazy fine for a bank that just didn't have the right systems in place 
. It's like they thought financial crime controls were optional 
. The fact that this scam went down because someone was able to abuse their accounts and get away with it for months is a total fail 
. I don't care what anyone says about Debbie Crosbie's pay package, but Nationwide should be focusing on fixing their own problems instead of playing the blame game 
.
. The fact is, there are still gaps in our financial systems that need to be filled 
. So let's not just fine Nationwide and call it a day; let's use this as an opportunity to push for better regulation and more effective controls 
.
So £44m fine seems kinda harsh for Nationwide, but I guess it's a wake-up call for them to get their financial crime controls in check. I mean, £800k is still a pretty big chunk of change that went missing due to their weaknesses. 
But seriously, this is kinda big. The FCA is saying that Nationwide was aware of suspicious activities as early as 2014 but didn't do anything about it. That's crazy! 
They can't just let customers do whatever they want and then apologize afterwards 
. The FCA is trying to hold them accountable and that's a good thing 
if they wanna keep their reputation intact. £44m fine is a huge slap on the wrist, but it's not enough considering the damage that was done 
It's not exactly rocket science, is it? And now they're paying the price with their reputation and customers' trust 
. The fact that they knew about these suspicious activities as early as 2014 but didn't act on them is just not acceptable 
. The FCA needs to crack down on building societies and banks failing to control financial crime, it's not like it's a big deal 
. And £44m is a pretty penny to pay for being lazy 
. The fact that Debbie Crosbie's annual pay package is, like, 7 million and people are saying it's "obscenely high" 
.
. Debbie Crosbie's pay package tho... like what even is that?! 
I mean, I get it, financial crime is no joke, but come on Nationwide, you're a building society not a bank. You've got the "trust" thing down, just don't mess with people's personal info and maybe everything will be okay 
. It's alarming to think that a lack of proper systems and oversight allowed for such egregious cases of Covid fraud, which ultimately cost UK taxpayers a significant amount 
. Unfortunately, Nationwide's failure to act on red flags in 2014 is a perfect example of how complacency can lead to catastrophic consequences 
the £800k that's still unrecovered is just devastating 
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