Not upheld: service failure / poor communication / international transfer delay complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr I transferred £6,444.50 internationally in August 2022, but the funds were blocked by OFAC sanctions and held by an intermediary bank. Barclays discovered the OFAC hold in June 2024 but did not inform Mr I until September 2024, causing a three-month delay. After Mr I applied for an OFAC licence in October 2024, the funds were eventually released and returned in September 2025, but at £1,000 less due to exchange rate fluctuations. Mr I claimed Barclays should compensate him for the exchange rate loss and his subsequent business collapse and financial difficulties. The ombudsman found that while Barclays' communication was poor and warranted the £200 compensation they offered, Barclays were not responsible for the OFAC hold, the exchange rate loss, or Mr I's business failures, as these resulted from circumstances beyond their control.

The Ombudsman's reasoning

The ombudsman found that while Barclays failed to communicate effectively by not informing Mr I of the OFAC hold for three months after discovering it, Barclays were not responsible for the funds being held by OFAC in the first place, as this was outside their control. The ombudsman reasoned that even with earlier communication, Mr I would still have needed to apply for an OFAC licence which could have taken 6-12 months, so the delay in communication would not have materially changed the outcome. The exchange rate loss occurred due to the passage of time and OFAC's actions, not Barclays' conduct. The ombudsman also found that the business collapse and financial difficulties occurred much earlier than the exchange rate loss materialized, so Barclays could not be held liable for those consequences.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website