Not upheld: Account closure without notice complaint against Investengine (UK) Limited

Decision detail

Summary

Mr C complained about Investengine's request for a selfie as part of KYC checks and the subsequent delay in transferring his ISA and pension funds to another provider. Mr C refused to provide the selfie unless compensated £1,000, and Investengine froze his account pending completion of AML checks. The ombudsman found that Investengine's actions were lawful and proportionate, as all regulated firms are obligated to complete KYC and AML checks to prevent fraud and money laundering, and firms are required to restrict fund movements until such checks are completed. The ombudsman rejected Mr C's complaint and upheld Investengine's £100 goodwill payment for minor service issues.

The Ombudsman's reasoning

The ombudsman found that all regulated financial services firms are legally obligated to complete KYC and AML checks to prevent money laundering and fraud. The request for a selfie was proportionate to the risk posed and consistent with industry practice and FCA expectations. The FCA has emphasized the importance of protecting customer savings from fraudulent access, and firms are entitled to restrict fund movements pending completion of required checks. The delay was caused by Mr C's unwillingness to cooperate with the AML process, not by unreasonable conduct by Investengine. The concept of trespass does not apply to funds held as part of a regulated investment arrangement where firms are required by law to maintain appropriate controls.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website