Not upheld: Account closure without notice complaint against Sumup Payments Limited

Decision detail

Summary

Mr K complained that SumUp unreasonably closed his business's merchant services account and withheld approximately £580 in funds, seeking immediate release and £10,000 compensation. SumUp offered to either refund the funds to original payers or hold them for two months pending chargebacks, citing industry regulator security measures as the reason for closure. The ombudsman found that SumUp acted in accordance with the account terms, which Mr K had agreed to, and that withholding funds pending chargebacks is standard industry practice. The complaint was not upheld as the account had been inactive since 2023 and no material business impact resulted from the closure.

The Ombudsman's reasoning

SumUp has broad commercial discretion in deciding which accounts to service. The account closure was in line with the terms which Mr K agreed to, and the account had been inactive since 2023 so closure would not materially impact the business. Withholding funds pending chargebacks is standard industry practice and was outlined in the terms. SumUp offered reasonable options and there were no unreasonable delays in returning the funds.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website