Partially upheld: account restrictions, fraud prevention procedures, and service failures in communication complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Miss M complained that Halifax unfairly blocked her account and subjected her to excessive questioning when she attempted to make a four-figure payment to a payee she had previously sent money to. Halifax's fraud systems flagged the payment as high risk and invoked Banking Protocol, requiring police involvement. Although the ombudsman found Halifax's fraud prevention measures and account restrictions were justified by regulatory obligations to protect customers, Halifax failed to communicate clearly and provide adequate explanations when restrictions were applied, removed, and re-applied without warning. The ombudsman upheld the complaint in part, finding that better communication would likely have resolved the matter more efficiently and reduced Miss M's distress. Halifax was ordered to pay £450 in total compensation (£160 additional to the £290 already paid).

The Ombudsman's reasoning

While Halifax's fraud prevention measures and account restrictions were justified by its legal and regulatory obligations to protect customers from financial harm, and the invocation of Banking Protocol was appropriate given the identified risk, Halifax failed to communicate clearly and provide adequate explanations when restrictions were applied, removed, and re-applied. The ombudsman found that Halifax should have clearly explained why restrictions were re-applied after Miss M had fully cooperated with all requests, and that better communication would likely have enabled the restrictions to be lifted sooner and resolved the matter more efficiently. The service failures in communication, rather than the fraud prevention actions themselves, constituted unfair treatment.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website