Not upheld: credit limit reduction and refusal to reinstate following identity fraud complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mr H complained that Barclaycard reduced his credit card limit from £11,500 to £300 without warning in July 2025, and subsequently refused to reinstate it despite the reduction being caused by identity fraud. The adverse information resulting from the fraud was removed from his credit file by September 2025, but Barclaycard still declined to increase the limit following a manual review. The ombudsman found that Barclaycard acted fairly and reasonably throughout, as it was not aware of the fraud when making the initial reduction decision, was entitled to refuse reinstatement while adverse information remained on file, and conducted a fair review after the fraudulent information was removed before declining reinstatement based on its lending risk assessment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Barclaycard acted fairly in reducing the credit limit based on adverse information on the credit file, as it would not have been aware of the identity fraud at the time of the decision. It was reasonable for Barclaycard not to reinstate the limit while adverse information remained on the credit file. Following removal of the fraudulent information, Barclaycard conducted a fair manual review considering affordability and credit data, and was entitled to decline reinstatement based on remaining concerns. The 4-6 month waiting period policy is standard industry practice and did not affect the outcome as the manual review had already been conducted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website