Nationwide Building Society is facing intense scrutiny after the UK’s Financial Conduct Authority (FCA) imposed a £44m penalty over weaknesses in its financial crime controls—failures that regulators say contributed to red flags being missed in a major Covid furlough fraud case. 1
Coverage continued on Sunday, 14 December, with fresh summaries of the case highlighting the building society’s Swindon base and the regulator’s view that Nationwide’s measures fell short during the period under investigation. 2
What happened: the £44m fine and the period under investigation
The FCA says Nationwide had inadequate anti-financial crime systems and controls between October 2016 and July 2021, including weaknesses in customer due diligence, risk assessments and transaction monitoring for personal current accounts. 1
A central issue, regulators say, was that Nationwide knew some customers were using personal accounts for business activity—against its own terms—at a time when it did not offer business current accounts, leaving it without the right processes to manage the higher money-laundering risks that can come with business-related payments. 1
The Covid furlough fraud case at the centre of the regulator’s findings
The FCA highlighted what it described as a serious case linked to the UK government’s pandemic-era support, the Coronavirus Job Retention Scheme (JRS).
In the Final Notice, the FCA sets out how JRS funds paid into personal accounts were a “strong indicator” of business use, and records that 33,678 JRS payments totalling £64.6m were paid into 5,191 personal accounts at Nationwide. 3
The regulator says one customer (“Customer A”) received 24 JRS furlough payments—including £26.01m deposited over just eight days—after fraudulent claims. 3
While tax authorities recovered most of the money, the FCA says a significant amount was not recovered: the press release puts this at approximately £800,000, while the Final Notice includes a more specific figure of £820,687 remaining unrecovered in the case narrative. 1
How the £44m figure was calculated
The FCA’s Final Notice states the Authority imposed a financial penalty of £44,078,500, and notes it would have been £62,969,297 without the settlement discount applied under the FCA’s procedures. 3
The document also states the penalty must be paid no later than 29 December 2025. 3
Nationwide’s response: self-reporting, remediation and customer impact
Nationwide says it identified the issues through its own reviews, voluntarily brought them to the FCA, and cooperated fully with the investigation. It also apologised for controls that “fell below” its standards and said it has invested significantly in its economic crime control framework since 2021. 4
In its statement, Nationwide adds that it does not believe the control issues caused financial loss to customers, and says it remains committed to preventing economic crime and protecting customers and the wider UK economy from fraud. 4
Why this matters beyond Nationwide: business use of personal accounts and AML risk
The case is likely to resonate across UK retail banking for a simple reason: it sits at the crossroads of two persistent issues regulators and lenders grapple with:
1) The “personal account used like a business account” problem
When customers run business activity through personal accounts—whether knowingly or out of convenience—it can blur expected payment patterns and make effective monitoring harder. The FCA’s Final Notice explicitly links JRS receipts into personal current accounts with heightened risk and missed opportunities to act. 3
2) Pandemic support schemes and long-tail fraud risk
Even years after emergency schemes were launched, enforcement actions like this underline how vulnerabilities can surface later—particularly where the controls designed for “normal” retail banking collide with unusual, high-volume flows that look more like commercial activity.
Key takeaways on 14 December 2025
- Nationwide has been fined £44m by the FCA for financial crime control failings covering Oct 2016 to July 2021. 1
- Regulators say weaknesses contributed to missed red flags in a case where a customer received fraudulent furlough payments, including £26.01m in eight days, with around £800,000 still unrecovered. 1
- The FCA’s Final Notice puts the penalty at £44,078,500 after discount, payable by 29 December 2025. 3
- Nationwide says it self-reported the issues, has invested in improvements since 2021, and believes customers did not suffer financial loss. 4
