Upheld: incorrect advice on direct debit indemnity and improper handling of indemnity claim complaint against Barclays Bank UK PLC

Decision detail

Summary

Mrs G and Mrs T complained to Barclays about incorrect advice regarding a direct debit indemnity claim related to a defective flooring installation. During two phone calls in June 2025, Mrs T asked about options to dispute the flooring retailer's charges and was initially told a direct debit indemnity was not available. On a second call, despite being told the indemnity could not be used for contractual disputes, Mrs T persuaded the adviser to start the claim, which resulted in her account being marked as in arrears with credit reference agencies. Barclays partially upheld the complaint and paid £100 compensation. The ombudsman upheld the complaint, finding the adviser should not have started the claim, but determined the compensation was appropriate and directed Barclays to issue an explanatory letter to the finance company.

The Ombudsman's reasoning

The ombudsman found that while Barclays could have been clearer in explaining how a direct debit indemnity works, Mrs T was insistent on starting the claim despite being advised it was not appropriate for a contractual dispute. The adviser should not have been persuaded to start the claim process. However, the ombudsman noted that Mrs T's own statements in the calls showed she was aware of the potential credit score impact and was willing to accept this risk. The £100 compensation already paid was considered appropriate for the inconvenience caused.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website