Upheld: Account closure without notice complaint against First Rate Exchange Services Ltd

Decision detail

Summary

Miss B purchased a Post Office Travel Card in June 2025 and loaded her holiday money onto it, but the card was subsequently blocked pending ID verification. First Rate required a bank statement despite Miss B having already provided a utility bill and passport, and despite the statement not being immediately available as she had only just loaded the card. The block was not removed until Friday, the last night of Miss B's holiday, and she was not notified of its removal. First Rate declined to communicate with the ombudsman about the complaint. The ombudsman upheld the complaint, finding that insufficient prominence was given to the possibility of blocking at the point of sale, the verification requirements were onerous and unfair, and the delay caused Miss B to curtail her holiday activities. Compensation of £150 was ordered.

The Ombudsman's reasoning

The ombudsman found that while First Rate is entitled to conduct ID checks under its terms and conditions, insufficient prominence was given to this possibility at the point of sale by Post Office counter clerks acting as First Rate's agents. First Rate failed to provide any explanation for why the check was necessary in Miss B's circumstances and failed to communicate with the ombudsman, preventing a finding that the check was reasonable. Given that Miss B had already provided sufficient identity documents and that customers purchasing travel cards typically need funds imminently, requiring a bank statement that would not be immediately available was deemed onerous and unfair. The five-day delay before removing the block, occurring on the last day of her holiday, caused Miss B to curtail her activities. The failure to notify Miss B that the block had been temporarily removed compounded the poor service.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website