Not upheld: payment recall delay and service failure complaint against Barclays Bank UK PLC

Decision detail

Summary

Company M made an incorrect payment of an unspecified amount on 3 October 2025 and immediately requested Barclays to recall it. Barclays delayed processing the Faster Payment Recall until 10 October 2025, five working days beyond its published two working day timeframe. When the recall eventually completed, only £176.68 was recovered due to insufficient funds in the payee's account. Barclays offered £20,201.95 (based on the payee's account balance on 6 October) plus 8% simple interest and £150 compensation to the director. The ombudsman found this offer fair and reasonable, rejecting the complainant's argument that compensation should be based on a higher balance from 5 October, as the ombudsman determined the 6 October balance was the appropriate reference point for assessing what would likely have been recovered if Barclays had processed the recall within two working days.

The Ombudsman's reasoning

The ombudsman accepted that Barclays delayed the recall process by five working days beyond its expected two working day timeframe. However, the ombudsman determined that the fair measure of compensation should be based on the payee's account balance on 6 October 2025 (two working days after the error was reported), rather than the balance on 5 October. The ombudsman reasoned that even if Barclays had processed the recall correctly, it would have been dependent on the payee's bank obtaining consent from the payee before protecting the funds. The ombudsman found Barclays' offer of £20,201.95 (the difference between the 6 October balance and the amount actually recovered) plus 8% simple interest from 7 October to be fair and reasonable compensation for the delay.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website