Partially upheld: Account administration errors complaint against M & G Securities Limited

Decision detail

Summary

Mrs H complained that M&G Securities failed to process her ISA withdrawal after she submitted verification documents. M&G had received two calls on the same day requesting withdrawal, with the first caller failing security and the second passing security. Due to security concerns about potential unauthorized access, M&G requested certified verification documents from Mrs H. Although M&G's security measures were reasonable and justified, the ombudsman found that M&G failed to communicate its certification requirements clearly and early, leading to confusion and unnecessary delays. The ombudsman upheld the complaint in part, ordering M&G to pay £100 for the distress caused by poor communication, but rejected Mrs H's claim for compensation for lost investment growth, finding M&G's decision to hold funds pending verification was reasonable.

The Ombudsman's reasoning

M&G had a regulatory obligation to protect Mrs H's account and acted reasonably in requesting verification documents given the security concerns arising from the two calls with different security outcomes on the same day. The firm was entitled to request certified documents to satisfy itself that the account had not been compromised. However, M&G failed to communicate its certification requirements clearly and early enough, leading to unnecessary confusion and additional correspondence. The ombudsman found that while M&G's security measures were justified, its communication was deficient.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website