Not upheld: account closure / affordability assessment complaint against Barclays Bank UK PLC (trading as Barclaycard)

Decision detail

Summary

Mr Z complained that Barclaycard unfairly closed his credit card account after he disclosed financial difficulties and requested a medical write-off of his loan, arguing he had maintained his card repayments and was not informed the loan request would impact his credit card. Barclaycard closed the account after determining Mr Z's expenditure significantly exceeded his income (monthly deficit over £1,300), despite his circumstances improving and arrears remaining below £25. The ombudsman found the closure was reasonable given the substantial affordability risk, though acknowledged Barclaycard failed to communicate that the loan write-off request might affect other accounts, for which £100 compensation was paid. The ombudsman did not uphold the complaint, finding Barclaycard acted within its contractual rights and as a responsible lender.

The Ombudsman's reasoning

The ombudsman found that although Mr Z maintained his credit card repayments, Barclaycard could reasonably conclude that the risk of non-repayment had significantly increased based on his overall financial circumstances, particularly the substantial monthly deficit between income and expenditure. The account terms and conditions permitted Barclaycard to limit or close the account when the risk of non-payment increased significantly. As a responsible lender, Barclaycard had an obligation to ensure borrowing was sustainable. The ombudsman accepted that Mr Z was not made aware the loan write-off request might impact his credit card, for which Barclaycard paid £100 compensation, but found no evidence of unfair treatment regarding his vulnerabilities.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website