Not upheld: operational error / incorrect fund transfer complaint against Lloyds Bank PLC

Decision detail

Summary

Miss S complained that Lloyds Bank transferred all funds from her current account into a newly opened ISA instead of the £4,000 she had requested in July 2025. She did not discover the error until 6 September 2025 when attempting a telephone transfer, by which time she had no access to her emergency funds. The discovery occurred on a weekend, delaying resolution by three days. Lloyds Bank admitted the error and offered £350 compensation plus lost interest. The ombudsman upheld the bank's position, finding the compensation package fair and reasonable for the distress, inconvenience, and financial loss caused.

The Ombudsman's reasoning

The ombudsman accepted that Lloyds Bank made a clear error in transferring all funds instead of £4,000, and that this caused Miss S distress and inconvenience by denying her access to emergency funds for three days. However, the ombudsman found that Lloyds Bank's compensation package—£350 for distress and inconvenience plus calculated lost interest paid into the replacement ISA—fairly and reasonably compensated Miss S for all losses incurred. The ombudsman was satisfied that Miss S's delay in discovering the error was understandable given her account usage patterns, and that the weekend timing of discovery was unfortunate but not a basis for additional compensation beyond what was already offered.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website