Partially upheld: interest calculation and account management; inadequate customer communication complaint against Lloyds Bank PLC

Decision detail

Summary

Mrs B complained about interest charges on her Lloyds credit card account after resuming use in May 2025. The core issue involved a £303 transaction from December 2018 that was disputed but unsuccessfully challenged via chargeback in early 2019. Lloyds incorrectly continued marking this amount as 'in dispute' until October 2021, during which time no interest accrued on it. Once the 'in dispute' marker was removed in October 2021, the £303 became payable and subject to interest. The ombudsman found that interest was applied fairly and that Mrs B was not disadvantaged by the period when the amount was marked as 'in dispute'. While acknowledging that Lloyds could have provided better explanation of the account status when Mrs B contacted them in 2025, the ombudsman upheld Lloyds' offer of £75 compensation as fair and reasonable for this service shortcoming.

The Ombudsman's reasoning

The ombudsman found that interest was applied fairly to Mrs B's account once the £303 was removed from the 'in dispute' status in October 2021. While the £303 was incorrectly marked as 'in dispute', Mrs B was not made worse off during that period as no interest was charged on it. The ombudsman's jurisdiction was limited to the complaint about interest applied from May 2025 onwards, not the broader question of whether the £303 should have been on the account. The ombudsman accepted that Lloyds could have provided better explanation and support to Mrs B when she contacted them in 2025, justifying compensation for this service failing, but this did not alter the fact that interest was calculated correctly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website