Not upheld: Direct Debit Indemnity Claim rejection - contractual dispute classification complaint against TSB Bank plc

Decision detail

Summary

Mrs C complained that TSB failed to process her Direct Debit Indemnity Claim for 27 payments totalling over £6,000 made to a utility firm between May 2021 and November 2024. She claimed the utility firm breached their contract by sending bills electronically rather than by post as agreed, despite her request for postal correspondence. TSB rejected the claim on the same day, stating that contractual disputes are not covered by the DD Guarantee scheme. The ombudsman found that Mrs C's complaint constitutes a contractual dispute between her and the utility firm, not a payment error, and therefore falls outside the scope of the DD Guarantee scheme, which is strictly limited to rectifying payment errors. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman agreed with TSB that Mrs C's complaint concerns a contractual dispute between her and the utility firm regarding the method of bill delivery, not a payment error. The DD Guarantee scheme is strictly limited to rectifying payment errors such as incorrect amounts, wrong dates, or unauthorised debits. Since Mrs C acknowledged the money was owed to the utility firm and the DD amount was correct and remained constant, the scheme cannot be used to reclaim payments. The issue of whether bills should be sent by post rather than electronically is a matter for Mrs C to pursue directly with the utility firm, not through the DDIC process.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website