Partially upheld: mal-administration of dispute handling and incorrect account adjustments complaint against Lloyds Bank PLC

Decision detail

Summary

Mr P complained about Lloyds' mal-administration of his credit card dispute regarding a faulty washing machine purchase. Lloyds temporarily credited his account but then incorrectly reversed the credit, believing the supplier had refunded the full amount when only postage costs were refunded. Although Lloyds upheld the complaint and reapplied the credit with £100 compensation, Mr P sought £750 and a full breakdown of adjustments. The ombudsman found that while Lloyds made administrative errors, it appropriately remedied them, Mr P suffered no financial loss, and no adverse credit reporting occurred. The ombudsman upheld the complaint but awarded only an additional £100 compensation (£200 total) as proportionate to the distress caused.

The Ombudsman's reasoning

While Lloyds made administrative errors in reversing the temporary credit without proper verification, the bank appropriately remedied these errors by reapplying the credit and ensuring Mr P received a full refund. Mr P did not suffer any financial loss as he did not pay the inflated balance, did not incur unwarranted interest or fees, and no adverse information was reported to CRAs. The ombudsman determined that compensation should be proportionate to the distress and inconvenience caused by the administrative error rather than the amount Mr P claimed.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website