Upheld: inadequate disclosure and explanation of money transfer terms and interest implications complaint against Lloyds Bank PLC
Financial Ombudsman decision DRN-6322215 of 2026-04-28T00:00:00+00:00. inadequate disclosure and explanation of money transfer terms and interest implications complaint against Lloyds Bank PLC. Outcome: Upheld.
Decision detail
| Reference | DRN-6322215 |
|---|---|
| Decision date | 2026-04-28T00:00:00+00:00 |
| Firm | Lloyds Bank PLC |
| Product | credit card |
| Claim type | inadequate disclosure and explanation of money transfer terms and interest implications |
| Outcome | Upheld |
| Remedy | Lloyds must: (1) rework Miss S's credit card account to remove all purchase interest charged because of the money transfer arrangement, refund all such interest, and adjust the account balance as if interest had never been applied; (2) adjust historical credit file reporting accordingly; (3) if any transfer balance remains, resolve it by transferring to a separate account under the same 0% terms or ensure no interest on future purchases if paid in full monthly; (4) pay £150 compensation for distress and inconvenience. |
Summary
Miss S complained that Lloyds charged her purchase interest after she took out a 0% money transfer, which she did not understand would prevent her from avoiding interest through her usual practice of clearing her balance monthly. Although Lloyds provided factually accurate information during the call and Miss S acknowledged it, the ombudsman found that Lloyds failed to adequately explain the practical consequences of maintaining a money transfer balance given her specific account history and concerns about interest. The ombudsman upheld the complaint, finding that fairness required more than technical correctness and that Lloyds should have provided a clearer explanation of how the money transfer would affect her ability to avoid purchase interest. Lloyds was ordered to refund all purchase interest charged due to the money transfer, adjust credit file reporting, and pay £150 compensation.
The Ombudsman's reasoning
While Lloyds provided factually accurate information, the ombudsman found that fairness requires more than technical correctness. The wording used did not explain the practical consequence that maintaining a money transfer balance would prevent Miss S from continuing to avoid purchase interest through her usual payment method. Given Miss S's express concern about interest, her long-standing account usage pattern, and the non-intuitive nature of the outcome, Lloyds should have provided a clearer, real-world explanation of how the money transfer would affect her ability to avoid purchase interest. Lloyds made no attempt to check Miss S's understanding or explain how the rule would apply to her usual card usage pattern. The subsequent account usage (continuing to pay off purchases monthly while making additional payments toward the transfer) is consistent with Miss S not understanding the implications.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Lloyds Bank PLC, all decisions | 19,826 | 16% |
Source
Read the original decision on the Financial Ombudsman Service website