Partially upheld: Account administration errors complaint against TSB Bank plc

Decision detail

Summary

E, a limited company, complained that TSB failed to transfer over £80,000 in bond proceeds to a designated account at another bank on the maturity date of 20 February 2025, despite E providing clear written instructions. E claimed this caused a loss of approximately £9,000 when it missed a wholesale purchase opportunity with a pre-arranged buyer. TSB acknowledged the error and offered £100 compensation. The ombudsman upheld the complaint regarding TSB's failure to follow instructions but rejected the claim for the £9,000 business loss, finding insufficient evidence that the loss was foreseeable given E's refusal to provide complete bank statements and the fact that E moved the bond proceeds to another company rather than using them immediately for the transaction.

The Ombudsman's reasoning

The ombudsman found that TSB made a clear error in failing to follow E's explicit written instructions to transfer the bond proceeds to the designated account. However, the ombudsman was not satisfied that the claimed loss of £9,000 was foreseeable or directly caused by TSB's failure. The ombudsman required evidence that E's business model involved regular buying and selling transactions that would make the loss foreseeable, and that E did not have alternative means to fund the purchase. E's refusal to provide three months of bank statements, combined with the evidence that E moved the bond proceeds to another company (suggesting it was not urgently needed for the transaction), meant the ombudsman could not fairly hold TSB responsible for the business loss. The ombudsman noted that the bond's 4.30% interest rate was significantly lower than E's claimed trading returns of 10%, which raised questions about why E would tie up working capital in the bond if it regularly conducted high-return trades.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website