Not upheld: unfair account closure / failure to comply with contractual obligations complaint against Barclays Bank Plc trading as Barclaycard

Decision detail

Summary

B, a company with a merchant services agreement with Barclaycard, complained that Barclaycard unfairly closed its account. In March 2025, Visa notified Barclaycard of a potential data breach affecting B's customers' card details. Barclaycard required B to engage an independent PCI Forensic Investigator to investigate the breach, with a deadline of 23 May 2025. B refused to comply, citing the cost of approximately £3,000 and requesting to conduct its own investigation instead. After B failed to comply despite reminders, Barclaycard closed the account on 23 May 2025, causing B to lose significant sales revenue. The ombudsman found that the contractual requirement for an independent investigation was reasonable and clearly communicated, and that Barclaycard was entitled to terminate the agreement under the terms and conditions when B failed to comply.

The Ombudsman's reasoning

The ombudsman found that Clause 10.1(c) of the Agreement clearly required B to engage an independent PCI Forensic Investigator at its own cost following a suspected data compromise. Barclaycard communicated this requirement clearly on 28 March 2025 and sent reminders, including on 1 April 2025. Although B expressed concerns about cost and requested to conduct its own investigation, the contractual requirement for an independent investigation was reasonable given the nature of the breach. Barclaycard did not ignore B's requests for customer details; rather, Visa refused to release them due to GDPR concerns. Since B failed to comply with the contractual requirements despite clear notice and reminders, Barclaycard was entitled to terminate the Agreement under Clause 18.1(f).

How this compares

Source

Read the original decision on the Financial Ombudsman Service website