Upheld: Incorrect borrower identification on loan agreement; irresponsible lending process complaint against Barclays Bank UK PLC
Financial Ombudsman decision DRN-6004748 of 2026-06-02T00:00:00+00:00. Incorrect borrower identification on loan agreement; irresponsible lending process complaint against Barclays Bank UK PLC. Outcome: Upheld.
Decision detail
| Reference | DRN-6004748 |
|---|---|
| Decision date | 2026-06-02T00:00:00+00:00 |
| Firm | Barclays Bank UK PLC |
| Product | Personal loan |
| Claim type | Incorrect borrower identification on loan agreement; irresponsible lending process |
| Outcome | Upheld |
| Remedy | Barclays Bank UK PLC must: (1) Cease to pursue Ms K for the outstanding BBL debt; (2) Remove any adverse entries relating to the BBL from Ms K's personal credit record. No compensation for distress and inconvenience awarded as Ms K's business had the benefit of the funds and she benefited from dissolving the company rather than undertaking costly liquidation. |
Summary
Ms K, a sole trader with a Barclays business account since 2014, transferred her trading to a limited company (C) in 2017. In 2020, C's manager applied for a £50,000 BBL online, including C's company number but using Ms K's sole trader account details and a different borrower name. Barclays issued the loan agreement in the name provided by the manager without querying the discrepancies. When C was dissolved in 2025 and repayments stopped, Barclays pursued Ms K personally for the debt. The ombudsman upheld Ms K's complaint, finding that the combination of factors on the application should have prompted Barclays to query who the intended borrower was, and that the bank's process of automatically matching loans to account names created an unacceptable risk of contracting with the wrong applicant.
The Ombudsman's reasoning
The ombudsman found that the application form contained multiple indicators of intent to apply on behalf of C (company number, different borrower name, application from C's manager rather than Ms K). While BBL applications were self-attested and banks were not required to conduct usual checks, the ombudsman concluded that ignoring information actually provided on the application form when there was ambiguity about the intended borrower was unreasonable. The bank's process of being driven by account number and automatically putting the loan in the same name as the current account created a risk of contracting with the wrong applicant. The ombudsman found it was not readily apparent to Ms K that the absence of a matching bank account would be a problem or that the bank would automatically use the current account name. The bank, understanding its own process, should have queried the discrepancies. The 2022 KYC review confirmed C was the trading entity, but this did not establish that Ms K knew the BBL was in her sole name.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Barclays Bank UK PLC, all decisions | 11,138 | 21% |
| Personal loan, all decisions | 22,070 | 30% |
Source
Read the original decision on the Financial Ombudsman Service website