Not upheld: Card / payment disputes complaint against Cater Allen Limited

Decision detail

Summary

W, a company with a business account at Cater Allen, received a payment of over £300,000 from a Chinese business on 5 August 2024. Cater Allen delayed crediting the funds for approximately 15 days while conducting regulatory checks regarding the source of funds, purpose, export licences and sanctions compliance. Mr J, W's director, complained about the delay and the bank's inability to provide timescales. The ombudsman found that Cater Allen was within its contractual and regulatory rights to conduct such checks, that the investigation was reasonable given the payment's size and the new payer, and that the timeframe was not unreasonable. The complaint was not upheld.

The Ombudsman's reasoning

Banks have legal and regulatory obligations to conduct checks on payments to prevent fraud, money laundering, sanctions breaches and terrorism financing. The account terms and Fact Sheet permitted Cater Allen to delay payments while investigations were conducted. Given that the payment was significantly larger than previous payments, from a new payer, and represented a substantial portion of W's turnover, it was reasonable for the bank to investigate. The 15-day investigation period was not unreasonable, and the bank was entitled to be unable to provide exact timescales as the duration depended on what information emerged.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website