Not upheld: credit limit reduction decision and adequacy of communication complaint against Barclays Bank UK PLC trading as Barclaycard

Decision detail

Summary

Mr S complained about Barclaycard's decision to reduce his credit card limit from £3,500 to £100 and the communication surrounding this decision. Barclaycard made the reduction based on an alert from a credit reference agency indicating Mr S had entered into an arrangement to pay, which signals potential difficulty meeting contractual obligations. The ombudsman found that Barclaycard was entitled under its terms to reduce the limit without notice, provided two days' notice which exceeded minimum requirements, and gave Mr S sufficient information about the reasons for the decision. The ombudsman noted Mr S was not materially disadvantaged as he rarely used the card and declined an offered temporary increase. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Barclaycard received a legitimate alert from a credit reference agency indicating Mr S had entered into an arrangement to pay, which represents increased credit risk. Under the account terms, Barclaycard was entitled to reduce the credit limit without notice when appropriate. The two-day notice provided exceeded the minimum requirement. The information given to Mr S about the reasons for the decision was sufficiently clear, referencing credit reference agency checks and potential changes in circumstances. Mr S was not materially disadvantaged by the short notice as he rarely used the card for travel, which was his stated primary use. The fact that the arrangement to pay no longer appears on Mr S's credit file does not undermine Barclaycard's decision, as it may have been amended or removed by the reporting lender after the alert was sent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website