Not upheld: account restriction and transaction blocking due to fraud checks complaint against Clydesdale Bank Plc trading as Virgin Money

Decision detail

Summary

S, a business, complained that Clydesdale Bank Plc trading as Virgin Money unfairly restricted its account for 16 days while conducting fraud checks on a seven-figure transfer, causing lost interest. Virgin Money flagged the transaction for security checks and temporarily restricted the account before returning the funds to S's original account. The ombudsman found that Virgin Money acted reasonably and in accordance with its legal and regulatory obligations regarding fraud prevention and safeguarding of funds. Although the restriction was inconvenient, it did not constitute an error or unfair treatment, and therefore the complaint was not upheld and no compensation was awarded.

The Ombudsman's reasoning

Virgin Money's legal and regulatory obligations relating to fraud prevention and safeguarding of funds justified the temporary account restriction. Compliance with these obligations can legitimately result in transaction delays or account restrictions without the bank being responsible for consequent losses. The restrictions were not disproportionate given the substantial amount involved, and Virgin Money acted consistently with its business terms and obligations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website