Not upheld: loan application decline and inadequate explanation; poor customer service complaint against Barclays Bank UK Plc

Decision detail

Summary

T, a company represented by director Mr R, complained that Barclays Bank UK Plc declined its business loan application without properly explaining the reason. Barclays initially cited 'something' on a credit file (which did not exist), then later stated the decline was due to the application not meeting its lending criteria or risk appetite. The ombudsman found Barclays' lending decision was fair and reasonable based on confidential evidence, but acknowledged the bank's customer service was poor for providing incorrect initial information and delaying provision of requested telephone recordings. The ombudsman awarded £200 compensation for inconvenience caused by these service failures, rejecting claims for financial loss and distress compensation.

The Ombudsman's reasoning

The ombudsman found that while Barclays' customer service was poor in initially providing incorrect information about the decline reason and delaying provision of requested information, the lending decision itself was fair and reasonable. The ombudsman accepted Barclays' confidential evidence demonstrating that T's application fell outside the bank's lending criteria and risk appetite. The ombudsman rejected claims for financial loss, noting that Barclays was entitled to decline the application and different lenders have different criteria. For non-financial loss, the ombudsman could only award compensation for inconvenience to the corporate entity T, not for distress suffered by Mr R personally, and considered £200 appropriate for the repeated small errors and inconvenience caused over several weeks.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website