Not upheld: Account closure without notice complaint against Lloyds Bank PLC

Decision detail

Summary

Mr M complained that Lloyds refused to allow him to withdraw his funds in cash, blocked access to his account, and sent numerous cards, causing him financial difficulties. Lloyds had partially frozen the account due to fraud concerns following an unauthorized transaction on a damaged card. The ombudsman found that Lloyds' actions were justified given the large withdrawal amount (over £50,000) requiring 48 hours' notice under account terms and legitimate fraud prevention measures. The ombudsman upheld Lloyds' £250 compensation as fair and rejected Mr M's additional claims for losses, finding insufficient evidence of unfair conduct and inadequate mitigation efforts by Mr M.

The Ombudsman's reasoning

The ombudsman found that Lloyds' actions were justified on two grounds: first, the large withdrawal amount (over £50,000) required time for the branch to obtain sufficient cash, and Lloyds' 48-hour notice requirement was reasonable; second, Lloyds had a legitimate responsibility to protect against fraud by contacting police and exploring alternatives. The ombudsman concluded that Mr M's difficulties were not entirely Lloyds' fault and that the £250 compensation already paid was fair. The ombudsman rejected Mr M's claim for additional losses from the golf club purchase, finding insufficient evidence that Lloyds acted unfairly and that Mr M failed to mitigate his losses.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website