Not upheld: direct debit guarantee claim handling - refund denial complaint against Lloyds Bank PLC

Decision detail

Summary

Mr Q and Mrs R complained that Lloyds Bank wrongfully declined their direct debit guarantee claim for refunds of over £10,000 in payments made by lender B between March 2019 and December 2020. Mr Q claimed he had attempted to cancel the direct debit but it remained active, and that he was unaware of his rights under the guarantee scheme. The ombudsman found the complaint not upheld, determining that the evidence showed Mr Q had knowledge of the payments and had agreed to them as loan instalments, evidenced by deposits matching the payment amounts and timing. The ombudsman found Mr Q's cancellation claims not credible due to lack of supporting evidence, and concluded the payments were taken correctly.

The Ombudsman's reasoning

The ombudsman found Mr Q's claim that he took steps to cancel the direct debit to be not credible, as he provided no elaboration or evidence of contact with lender B. The pattern of transfers into the account matching the payment amounts and timing indicated Mr Q had knowledge of the payments. The 20-month duration of significant payments made it more likely than not that Mr Q was aware of them and had agreed to them as loan instalments. Therefore, the payments were not taken incorrectly, and the direct debit guarantee did not apply.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website