Not upheld: account closure without notice and adverse credit reporting complaint against Lloyds Bank PLC

Decision detail

Summary

Miss K complained that Lloyds Bank closed her current account without notice and recorded a default on her credit file. Lloyds had written to Miss K in April 2025 warning that it would remove her arranged overdraft if she didn't make a payment, and later warned in July 2025 that the account would be closed if she didn't contact them to arrange repayment. The account was closed in September 2025 with an outstanding overdraft balance of £1,300. Miss K claimed she did not receive the communications and did not regularly check her in-app inbox. The ombudsman found that Lloyds had contacted Miss K through multiple channels (post, text, and in-app) at least 10 times, and that Miss K's monthly access to her online banking made it unlikely she received none of these messages. The ombudsman concluded that Lloyds acted fairly and that the default was accurately recorded as required by law, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found it unlikely that Miss K would not have received any of the multiple communications from Lloyds across different channels (post, text, and in-app), particularly given that she accessed her online banking at least monthly. The ombudsman was satisfied that Miss K should have realised there was a problem with her account given the messages about failed payments. The ombudsman concluded that Lloyds acted fairly in withdrawing the overdraft and closing the account, and that the default was accurately recorded as required by law. The ombudsman rejected Miss K's claim that she was told everything was fine in August 2025, noting that even if true, it would not change the conclusion given the clear prior communications.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website