Not upheld: fraud marker application / account misuse complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr S complained that Barclays unfairly loaded him to a fraud database after he spent £559.99 during a Barclays IT outage on 1 February 2025 when his account balance was £0 and he had no agreed overdraft. Mr S claimed he did not realise his balance was £0 and expected salary to be paid into his account. Barclays applied a 'misuse of facility' fraud marker and closed his account. The ombudsman found that Mr S's spending pattern was highly unusual compared to his normal account usage, his salary payment history did not support his claim of expecting payment on 31 January 2025, and his eight-month failure to engage with Barclays despite repeated contact attempts suggested he was aware of the overdraft. The ombudsman concluded Barclays had reasonable grounds to apply the fraud marker and upheld Barclays' decision, declining to order removal of the marker.

The Ombudsman's reasoning

The ombudsman applied the Cifas standard requiring reasonable grounds (more than mere suspicion) that an identified fraud or financial crime was committed, with evidence clear, relevant and rigorous enough to report to police. The ombudsman found that Mr S's spending pattern was highly unusual and inconsistent with his normal account usage, particularly the large cash withdrawals of £300 in one day when his previous maximum was approximately £70. The timing of events during a known IT outage, combined with Mr S's failure to engage with Barclays for eight months despite repeated contact attempts, and his cessation of regular salary deposits and account credits, persuaded the ombudsman that Mr S was aware his account would become overdrawn and deliberately exploited the technical error. The ombudsman rejected Mr S's explanation that he expected salary on 31 January 2025, finding this inconsistent with his actual salary payment history. While acknowledging Barclays should not have allowed the overdraft in the first place, the ombudsman found Mr S bore responsibility for not engaging with Barclays or attempting repayment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website