Not upheld: account blocking and payment decline complaint against NewDay Ltd

Decision detail

Summary

Mr J complained that NewDay blocked his credit card account and declined a recurring payment for home insurance. NewDay had placed the block after mail sent to his registered address was returned as undelivered, citing security concerns. Mr J disputed that he had moved and requested proof of the returned letter and alternative contact methods. The ombudsman found NewDay's security block policy was reasonable and fairly applied, that it was appropriate not to send further correspondence to an unverified address, and that the block was promptly removed upon verification. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NewDay correctly applied its security block policy when mail was returned undelivered. The policy is designed to protect account holders from fraud risk and applies equally to all customers. The ombudsman determined it was not unreasonable for NewDay not to send further correspondence to an unverified address, as this could constitute a security breach. While the ombudsman acknowledged the frustration caused, the policy allows for the block to be removed once the customer makes contact and verification is completed, which occurred in this case.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website