Not upheld: failure to identify and intervene on compulsive spending; alleged breach of FCA vulnerable customer guidance complaint against Kroo Bank Ltd

Decision detail

Summary

Mr B complained that Kroo Bank Ltd failed to identify and intervene on his compulsive spending of over £6,500 between March 2024 and November 2025, arguing that the pattern of transactions to a single merchant should have alerted Kroo to his vulnerability. Kroo declined to uphold the complaint, stating it had followed correct procedures and Mr B had authorised all payments. The ombudsman found that Mr B's account remained well-managed and in credit throughout the period, individual transactions did not trigger fraud flags, and Mr B never contacted Kroo about the issue until November 2025. The ombudsman concluded there was no reasonable cause for Kroo to have manually intervened and therefore did not uphold the complaint, though acknowledged Mr B's difficult circumstances.

The Ombudsman's reasoning

The ombudsman found that while Kroo has a duty to monitor accounts, the activity on Mr B's account was not unusual enough to warrant manual intervention. The account remained in credit, no overdraft or lending was sought, and individual transaction amounts did not trigger fraud flags. The transactions were made from a recognised device to a familiar merchant. FCA guidance on monitoring for unusual activity is aimed at front-line staff during customer engagement, primarily to detect fraud rather than compulsive spending. Since Mr B did not contact Kroo about his issues until November 2025, Kroo had no opportunity to recognise the problem. The ombudsman concluded there was no reasonable cause for Kroo to have intervened.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website