Not upheld: service failure - delayed notification of returned cheque complaint against Bank of Scotland plc, trading as Halifax

Decision detail

Summary

Mrs G complained that Halifax should pay additional compensation for delays experienced when transferring her ISA. Halifax had applied a £52.40 early withdrawal charge when the ISA was closed early, but refunded this as a gesture of goodwill by sending a cheque to the receiving provider. The cheque was returned undelivered, and Halifax delayed informing Mrs G of this. Halifax paid £102.40 in total compensation (the refunded charge plus £50 for inconvenience) and offered to reimburse interest loss and reasonable costs. The ombudsman found this compensation fair and proportionate, not upholding the complaint for additional compensation.

The Ombudsman's reasoning

The ombudsman found that Halifax correctly applied the early withdrawal charge in accordance with the account terms, and was not at fault for the non-delivery of the cheque as it used the address provided on the transfer request with no reason to believe it was outdated. However, Halifax did fail to promptly inform Mrs G when the cheque was returned, which was a service shortcoming. The ombudsman considered that the total compensation of £102.40 already paid (the refunded charge plus £50 for distress and inconvenience) was fair and proportionate given the nature and duration of the delay and its impact on Mrs G, particularly as Halifax was under no obligation to refund the withdrawal fee in the first place.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website