Partially upheld: account blocking and service failure - unreasonable delay in removing account block complaint against TSB Bank plc

Decision detail

Summary

Mr B complained that TSB Bank plc unfairly blocked his account after he notified it of his intention to enter a Trust Deed, and that the £150 compensation offered did not adequately reflect the distress and inconvenience caused. TSB acknowledged it should have removed the block on 20 October 2025 when it learned the Trust Deed was not progressing, but did not do so until 18 November 2025, causing a four-week delay. The ombudsman found the initial block was fair and proportionate, but upheld the complaint in part regarding the delay, determining that £225 in total compensation was fair and reasonable, representing an increase of £75 from TSB's original offer.

The Ombudsman's reasoning

While the initial account block was fair and proportionate given the Trust Deed notification, TSB's four-week delay in removing it after learning the Trust Deed was not progressing constituted a service failure. The ombudsman distinguished between distress caused by Mr B's underlying insolvency and financial difficulties versus the additional distress caused specifically by TSB's delay. The account block had limited practical impact since Mr B had no available funds and direct debits were already cancelled. However, the unnecessary delay and Mr B's effort in chasing the matter once aware of it warranted compensation beyond TSB's initial £150 offer.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website