Partially upheld: Cifas fraud marker application and credit file management complaint against Lloyds Bank PLC
Financial Ombudsman decision DRN-6138041 of 2026-05-13T00:00:00+00:00. Cifas fraud marker application and credit file management complaint against Lloyds Bank PLC. Outcome: Partially upheld.
Decision detail
| Reference | DRN-6138041 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | Lloyds Bank PLC |
| Product | current account |
| Claim type | Cifas fraud marker application and credit file management |
| Outcome | Partially upheld |
| Remedy | Lloyds to pay £400 total compensation (£250 for distress and inconvenience from the marker, plus £150 for failure to communicate about debt recovery and default removal). Lloyds to remove the Cifas marker from Mr A's credit file, buy back the outstanding debt and reduce balance to zero, and amend credit file to remove the default. |
Summary
Mr A complained about a Cifas 'misuse of facility' marker placed on his credit file by Lloyds in May 2022 following disputed chargebacks. Lloyds closed his account and sold the outstanding balance to debt recovery agents. In 2025, Mr A provided information about extenuating circumstances (medical condition and business partner fraud), prompting Lloyds to agree to remove the marker and offered £250 compensation. Lloyds later increased its offer to £400 and agreed to buy back the debt and remove the default. The Ombudsman upheld the complaint in part, finding the marker was reasonably applied in 2022 but Lloyds made errors in its 2025 complaint handling. The £400 compensation was deemed fair and reasonable, and no award was made for Mr A's claimed £300,000 in lost business opportunities.
The Ombudsman's reasoning
The Ombudsman found that Lloyds did not act unreasonably in applying the Cifas marker in 2022 because it had received inconsistent explanations from Mr A and was not aware of extenuating circumstances at that time. The evidence showed the payments appeared to be authorised by Mr A. However, Lloyds made errors during its 2025 complaint investigation by failing to clearly communicate that it would buy back the debt and remove the default, and by delaying removal of the Cifas marker. These errors were characterised as random human error rather than systemic failure. The Ombudsman rejected Mr A's claim for £300,000 in lost business opportunities, noting that the marker was not unreasonably applied and Mr A himself stated he was in poor medical condition during the relevant period.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Lloyds Bank PLC, all decisions | 19,826 | 16% |
Source
Read the original decision on the Financial Ombudsman Service website