Britain’s Nationwide Building Society has been hit with a £44 million fine by the Financial Conduct Authority (FCA) for failing to maintain adequate anti-financial crime systems and controls over nearly five years, a period marked by one of the most significant Covid fraud cases in the UK. The FCA’s decision, announced on December 12, 2025, comes after a detailed investigation found that between October 2016 and July 2021, Nationwide’s systems for monitoring and preventing financial crime were not up to scratch, exposing both the building society and UK taxpayers to substantial risk.
According to Investing.com and corroborated by Reuters and The Guardian, the FCA’s review highlighted that Nationwide—Britain’s second-largest mortgage lender—was aware that some of its personal account customers were using their accounts for business activities, a clear breach of its own terms and conditions. Despite this, the society did not offer business current accounts at the time and, as a result, lacked the necessary controls to manage the risks associated with business-related financial crime and money laundering.
Perhaps most alarmingly, the FCA’s investigation uncovered a high-profile case in which a Nationwide customer received 24 fraudulent Covid furlough payments totaling £27.3 million over a 13-month period. Of this sum, an astonishing £26.01 million was deposited in just eight days. While HM Revenue and Customs (HMRC) managed to recover £26.5 million, around £800,000 remains unrecovered, leaving UK taxpayers out of pocket. The FCA described this as a “serious” case, with multiple missed red flags that could have prevented the fraud.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, did not mince words in her assessment: “Nationwide failed to get a proper grip of the financial crime risks lurking within its customer base. It took too long to address its flawed systems and weak controls, meaning red flags were missed with serious consequences.” Chambers emphasized the crucial role that building societies and banks play in the fight against financial crime, adding, “Firms must remain vigilant in this fight.”
The FCA’s findings detailed a series of warning signs that were either overlooked or inadequately addressed by Nationwide. In the case of the customer who committed furlough fraud, the application process had raised suspicions as early as 2014, when the customer listed an office address as their residential address. Over the years, the customer attempted to change their address 11 times, with one address linked to a staggering 59,666 other companies. The individual also tried to open 20 current accounts, savings accounts, and credit cards, many of which were abandoned or denied. Notably, in 2019 and 2020, the customer’s name and address triggered a fraud network match alert. Despite these significant red flags, Nationwide failed to block the account, allowing the fraudulent activity to continue unchecked until authorities intervened.
The regulatory action against Nationwide is part of a broader crackdown on financial crime in the UK. Since 2021, the FCA has imposed 13 fines totaling more than £300 million on banks and building societies for anti-money laundering failures. The fine against Nationwide would have been even higher—£62.97 million—had the building society not agreed to resolve the matter, earning a 30% discount on the penalty.
Nationwide’s failures occurred under the leadership of former chief executive Joe Garner. While the building society had identified some of the issues through internal reviews and brought them to the FCA’s attention, the regulator found that Nationwide “failed to adequately address those weaknesses in a timely manner.” It was not until July 2021 that Nationwide launched a large-scale financial crime transformation program, marking the beginning of a concerted effort to overhaul its compliance systems. This transformation continued until the summer of 2024, during which time Nationwide also undertook a £2.9 billion takeover of its rival Virgin Money under the leadership of current CEO Debbie Crosbie.
Crosbie’s tenure has not been without controversy. She recently faced criticism over a 43% increase in her maximum annual pay to £7 million, a move some Nationwide members described as an “obscenity” and hypocritical, especially in light of the society’s ongoing challenges. Nonetheless, Crosbie was made a dame in the king’s birthday honours this summer and was appointed the new Women in Finance champion by Chancellor Rachel Reeves.
In a statement addressing the FCA fine, Nationwide expressed regret over its past shortcomings: “We are sorry that our controls during the period fell below the high standards we expect.” A spokesperson reiterated that the building society had voluntarily brought the issues to the FCA and “cooperated fully” with the regulator’s investigation. “Since 2021, Nationwide has invested significantly in all aspects of its economic crime control framework in order to ensure our systems are robust,” the spokesperson said. “We do not believe that these controls issues caused financial loss to any of our customers and remain committed to preventing economic crime and protecting our customers and the wider UK economy from fraud.”
The FCA’s fine came just days after the independent Covid counter-fraud commissioner, Tom Hayhoe, released a final report showing that fraud and errors had cost UK taxpayers £10.9 billion during the pandemic. The Nationwide case, with its missed red flags and unrecovered public funds, stands as a stark reminder of the importance of robust financial crime controls—especially in times of crisis when fraudsters are most likely to exploit systemic weaknesses.
Looking ahead, Nationwide’s recent investments in its compliance infrastructure, as well as its public commitment to fighting financial crime, will be closely watched by both regulators and the public. The FCA’s message is clear: financial institutions must ensure that their systems and controls are not only in place but also effective, proactive, and responsive to emerging risks. Anything less, as the Nationwide case demonstrates, can have serious and lasting consequences for customers and taxpayers alike.
As the UK continues to grapple with the fallout from pandemic-related fraud, the lessons from Nationwide’s failures—and the FCA’s firm response—are likely to reverberate across the financial sector for years to come.
