Partially upheld: unauthorized loan application / identity fraud / liability for loan obtained in customer's name complaint against Barclays Bank UK PLC trading as Tesco Bank

Decision detail

Summary

Mr S complained that Tesco Bank was pursuing him for an £8,000 loan he claimed he did not authorize. Investigation revealed that while the loan application on 17 April 2025 was made by someone other than Mr S (evidenced by the call recording not matching his voice), Mr S subsequently received the funds into his genuine account, confirmed receipt of correspondence about the loan, and knowingly transferred the funds to a former work colleague. The ombudsman upheld the complaint in part, finding that although Mr S did not initially authorize the loan, his actions after receiving the funds constituted acceptance of liability. Tesco was ordered to cease adding interest and charges and to work with Mr S on an affordable repayment plan for the remaining balance.

The Ombudsman's reasoning

On balance of probabilities, the call recording from the application date does not sound like Mr S, indicating another individual applied for the loan. However, Mr S's subsequent actions—receiving the funds into his account, confirming receipt of correspondence about the loan, providing loan details to Tesco, and knowingly transferring the funds to the work colleague—demonstrate he became aware of the loan and accepted liability by transferring the money out of his account. While Mr S did not initially authorize the loan, his conduct after receiving the funds constitutes acceptance of liability for repayment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website