Upheld: Account closure without notice complaint against Newbury Building Society

Decision detail

Summary

Miss C complained that Newbury Building Society marked her savings account as dormant without notification, preventing her from withdrawing funds to transfer to an ISA on the 2022/23 deadline (5 April 2023). When she visited the branch, she was denied access because she lacked a passbook and photo ID, despite having a bank statement. Her partner was able to make a withdrawal during the same visit using photo ID. NBS later acknowledged that Miss C's bank statement should have been sufficient to remove the dormancy marker. The ombudsman upheld the complaint, finding NBS failed to act reasonably by not informing Miss C of the dormancy status or providing adequate reactivation guidance. The ombudsman awarded £315 total compensation: £250 for financial losses (interest difference, tax reimbursement, and travel costs) plus £65 additional compensation for distress and inconvenience, bringing the total distress award to £150.

The Ombudsman's reasoning

The ombudsman found that NBS failed to act reasonably by not informing Miss C that her account was dormant, despite the account being in that status. The electronic message requesting a bank statement did not explain the dormancy or reactivation requirements. The ombudsman noted it was unreasonable that payments could be made into the dormant account without triggering reactivation or notification. The ombudsman concluded that had NBS acted properly, Miss C would more likely than not have been able to make the transfer before the ISA deadline, as the bank statement she possessed should have been sufficient to remove the dormancy marker. The ombudsman upheld the investigator's recommendation to increase distress and inconvenience compensation from £85 to £150, as this fairly reflects the frustration and inconvenience caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website