Partially upheld: unfair account closure and blocking; loss of interest; inadequate compensation complaint against Allica Bank Limited
Financial Ombudsman decision DRN-6122187 of 2026-04-17T00:00:00+00:00. unfair account closure and blocking; loss of interest; inadequate compensation complaint against Allica Bank Limited. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6122187 |
|---|---|
| Decision date | 2026-04-17T00:00:00+00:00 |
| Firm | Allica Bank Limited |
| Product | savings accounts (fixed term and easy access deposit) |
| Claim type | unfair account closure and blocking; loss of interest; inadequate compensation |
| Outcome | Partially upheld |
| Remedy | Allica Bank Limited directed to pay: (1) £200 compensation for time B's officers spent pursuing the complaint; (2) £3,334.96 in interest calculated as specified for the two fixed term accounts and easy access account based on the difference between rates received and rates that should have been received from the date of blocking/closure until funds were released or maturity date |
Summary
B, a limited company, complained that Allica Bank Limited blocked its three savings accounts on 31 May 2024 and closed them on 27 November 2024 without fair application of its immediate closure terms, with funds not released until 18 February 2025. Mr B, representing B, sought compensation for lost interest, explanation for closure, and £6,000 compensation for time spent pursuing the issue. The ombudsman partially upheld the complaint, directing Allica to pay £3,334.96 in lost interest and £200 compensation for time spent, but rejected the £6,000 claim and confirmed Allica had no obligation to disclose closure reasons, as the bank was complying with regulatory obligations regarding source of funds verification.
The Ombudsman's reasoning
The ombudsman found that Allica failed to apply its immediate closure terms fairly, justifying compensation for loss of interest. However, regarding the compensation amount, the ombudsman rejected the hourly rate approach, noting that compensation is not based on professional hourly rates but rather on the impact of the error. The ombudsman found £200 fair as the accounts were savings accounts not affecting day-to-day business operations. The ombudsman also determined that Allica was under no obligation to disclose the reasons for account closure or the triggers for account review, as this is standard banking practice and regulatory compliance.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Allica Bank Limited, all decisions | 10 | 10% |
Source
Read the original decision on the Financial Ombudsman Service website