Not upheld: compliance with court order / fund freezing complaint against Bank of Scotland plc

Decision detail

Summary

X complained that Bank of Scotland debited approximately £4,000 from their account pursuant to a court-ordered freezing notice without conducting due diligence to verify X was liable for the debt. X alleged the third-party S who served the order had committed fraud. Bank of Scotland maintained it was obliged to comply with the court order and had done so correctly. The ombudsman found that banks are not required to investigate the validity of debts or the relationship between debtor and creditor when acting on court-ordered freezing notices, and that such disputes must be resolved through legal channels. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Bank of Scotland received a valid court-ordered freezing notice and was obliged to comply with it. The ombudsman determined that it is not the bank's role to assess the validity of the underlying debt or investigate whether the account holder is liable to pay. The order was a legal document signed by a court officer, and Bank of Scotland correctly verified it applied to the correct individual. The ombudsman rejected X's suggestion that the bank should have conducted due diligence into the debt relationship, as such matters are for the debtor to resolve through legal channels, not for the bank to investigate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website