Not upheld: incorrect settlement figure / administrative error complaint against HSBC UK Bank Plc trading as First Direct

Decision detail

Summary

Mr A complained that HSBC provided an incorrect settlement figure for his loan, resulting in a £2.02 overpayment. HSBC acknowledged the error, apologised, and refunded the overpayment within four days, later offering £5 compensation. Mr A sought additional remedies including 8% interest, compensation for distress and inconvenience, and formal documentation. The ombudsman found HSBC's offer fair and reasonable given the minimal financial impact and quick resolution, and did not direct them to provide additional compensation.

The Ombudsman's reasoning

The ombudsman applied the FOS approach to compensation, which is to put the complainant back in the position they would have been in had the error not occurred. Given that the actual error involved only £2.02 and was resolved within four days, the ombudsman considered the impact was minimal. While HSBC admitted the error, the ombudsman found that a token payment of £5 plus the refund and apology was fair, as compensation for distress and inconvenience is not warranted when matters are resolved quickly and the financial impact is negligible.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website