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

Decision detail

Summary

Mr I complained on behalf of Y, a limited company, that SumUp Payments Limited unfairly restricted Y's business account and withheld funds following receipt of a £5,000 payment from Mr I's personal account in March 2025. SumUp initiated a review of Y's account and requested information about the payment and business, but Mr I did not provide all requested information and instead recalled the funds. SumUp closed Y's account in accordance with its terms and conditions. The ombudsman found that SumUp acted fairly and reasonably in exercising its regulatory obligations to conduct Know Your Customer and Customer Due Diligence checks, and that restricting account access during reviews is standard industry practice. The complaint was not upheld, and no compensation was awarded.

The Ombudsman's reasoning

Financial businesses in the UK are strictly regulated and must conduct ongoing monitoring of customer relationships, including KYC and CDD checks covering identity verification, purpose of business relationship, and origin of funds. SumUp acted fairly by restricting Y's account during its review, which is standard industry practice to prevent potential financial loss. Since Mr I did not provide all requested information, SumUp was entitled to restrict access and was not obliged to disclose the reasons for the restriction. The ombudsman noted it is not within FOS remit to dictate how businesses conduct KYC procedures, as each business has autonomy in meeting regulatory requirements. Regarding Mr I's personal distress, the ombudsman noted that Y is a limited company and cannot suffer distress or embarrassment, so compensation cannot be awarded for the complainant's personal inconvenience.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website