Not upheld: account closure and application of wages to overdraft debt complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr W complained that Barclays closed his overdrawn account and applied his wages to repay the overdraft, preventing him from accessing funds for essential living expenses. Barclays closed the account following a review and applied incoming wages to the overdraft debt before closing with a nil balance, having already paid £200 compensation. The ombudsman found Barclays was acting within its legal and regulatory obligations and in accordance with the account terms and conditions, which permitted immediate closure and required overdraft repayment on demand. Although Barclays provided incorrect information about accessing the wages, the ombudsman concluded the £200 compensation was fair and made no further award.

The Ombudsman's reasoning

The ombudsman concluded that Barclays was acting within its legal and regulatory obligations and in accordance with the account terms and conditions, which permitted immediate account closure and required overdraft repayment on demand. The overdraft terms stated that incoming funds would be applied to the overdraft before crediting the account. While Barclays could have handled communication better and incorrectly informed Mr W about accessing his wages, the ombudsman found the £200 compensation already paid was fair given that the account closure itself was lawful and the financial impact was largely unavoidable.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website