UK's Nationwide fined £44M for failing to prevent £27.3M in fraudulent furlough claims.

Nationwide Building Society has been fined £44 million by the UK’s Financial Conduct Authority for failing to properly manage financial crime risks between October 2016 and July 2021, including missing red flags in a major fraud case involving £27.3 million in fraudulent Covid-19 furlough payments. The FCA found inadequate systems, particularly in monitoring customers using personal accounts for business purposes, which increased money laundering risks. Although £26.5 million was recovered by HMRC, about £800,000 remains unpaid. The fine, reduced from nearly £63 million due to Nationwide’s cooperation and voluntary disclosure, follows a major transformation of its financial crime controls launched in July 2021. The society said it has since invested heavily in strengthening its systems and does not believe customers suffered financial loss.