Upheld: poor account handling, irresponsible account freezing without warning, failure to process information request complaint against Barclays Bank UK PLC

Decision detail

Summary

T, a limited company represented by its director Mr S, complained that Barclays handled an information request poorly and froze its business account without warning for approximately seven weeks. The account contained all of T's capital, preventing it from paying staff, bills, or conducting business, forcing Mr S to use personal funds. Barclays upheld the complaint and offered £750 compensation, but T rejected this and brought the complaint to FOS. The ombudsman upheld the complaint and increased the compensation to £1,500, plus compensatory interest at 8% and refund of all charges applied during the affected period, finding that Barclays' actions caused substantial inconvenience and serious disruption to T's business operations.

The Ombudsman's reasoning

The ombudsman found that Barclays made clear mistakes in handling the information request process, sending repeated requests for information already provided and failing to resolve the matter despite numerous contact attempts. The account freezing without warning caused substantial short-term impact and significant inconvenience to T, requiring considerable extra effort to resolve. While T is a limited company and cannot be compensated for distress, it can be compensated for inconvenience and financial loss. The ombudsman rejected T's claim for legal costs (as FOS is a free service) and the loss of the client (as no direct causal link was established). The ombudsman determined that £1,500 compensation for inconvenience, plus compensatory interest and fee refunds, was fair and reasonable given the serious disruption to the business for seven weeks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website