Not upheld: Fraud reimbursement (APP scams) complaint against Lloyds Bank PLC

Decision detail

Summary

E, a limited company, complained that Lloyds unfairly transferred its Bounce Back Loan account to recoveries and issued a formal demand despite telling E the loan was up to date on 5 July 2025 without adequate notice of arrears. E had missed multiple payments over a prolonged period from July 2023 onwards. Lloyds sent letters and text messages notifying E of arrears and issued a formal demand on 3 July 2025. On 5 July, Mr P was incorrectly told the loan was up to date but was advised to contact the lending team to confirm. E made further payments but did not clear all arrears, and the account was defaulted on 28 August 2025. The ombudsman found that although the 5 July information was incorrect, Mr P was clearly advised to verify it, and E had sufficient opportunity over seven to eight weeks to address the arrears. The complaint was not upheld, and the £75 compensation already paid was deemed fair.

The Ombudsman's reasoning

The ombudsman found that although Lloyds provided incorrect information on 5 July 2025, the agent clearly advised Mr P that the information was not definitive and recommended he contact the lending team to confirm. The formal demand had already been issued on 3 July 2025, and there was a seven to eight week period between the formal demand and the default during which E could have engaged with Lloyds to address the arrears. Mr P received further text message prompts indicating arrears remained. As director, Mr P had responsibility to monitor E's accounts and should have been aware of the missed payments. The ombudsman concluded that E had sufficient opportunity to recognise the account was not fully up to date and take steps to resolve it, and it was unreasonable to rely solely on the 5 July call without following up with the lending team.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website