Upheld: failure to provide explanation for credit limit reduction; lack of transparency in decision-making complaint against Barclays Bank UK PLC (trading as Barclaycard)

Decision detail

Summary

Mr M complained that Barclaycard reduced his credit card limit from £3,500 to £2,750 in October 2025 and could not provide a clear explanation for the decision. Barclaycard stated the reduction was made by an automated review system based on credit reference agency information and internal criteria, but could not identify the specific triggering factor. The ombudsman found that while Barclaycard had the contractual right to reduce credit limits, they acted unfairly by failing to provide Mr M with a coherent explanation despite his repeated requests, causing him frustration and inconvenience. The ombudsman upheld the complaint and ordered £200 compensation but did not require reinstatement of the original credit limit.

The Ombudsman's reasoning

While Barclaycard has the contractual right to reduce credit limits at their discretion, the ombudsman found that reductions should not be arbitrary and the firm should be able to explain the reasons. Although Barclaycard's automated system had a reason for the reduction, they were unable to extract or communicate it to Mr M or the FOS. This failure to provide a coherent explanation caused Mr M avoidable frustration and inconvenience that he should not have had to incur. The ombudsman distinguished between the lawfulness of the reduction itself (which was within Barclaycard's discretion) and the unfairness of how they handled Mr M's enquiries about it.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website