Upheld: failure to follow customer instructions on international payment; unfair exchange rate application complaint against Santander UK Plc

Decision detail

Summary

Mrs A complained that Santander failed to follow her instructions when sending the third of three international payments for an overseas property purchase. She had instructed that the £132,000 payment be converted to local currency by Santander before sending, consistent with her first two payments, but Santander sent it in sterling and the receiving bank converted it at an unfavourable rate, resulting in a shortfall of approximately £2,500. The ombudsman upheld the complaint, finding Mrs A's account credible based on the pattern of the first two payments, the logical need for a specific amount in local currency, and handwritten receipt amounts. Although Mrs A authorised the transaction via chip and pin, Santander bore responsibility as the expert party to clarify and follow customer instructions under the Consumer Duty. The ombudsman awarded £1,275 for financial loss plus 8% interest and £300 for distress and inconvenience.

The Ombudsman's reasoning

The ombudsman found that Mrs A's account of events was more credible than Santander's. The pattern of the first two payments being converted to local currency, the logical need for a specific amount in local currency for a property purchase, and the handwritten amounts on receipts all supported Mrs A's testimony that she instructed the third payment to be converted before sending. Although Mrs A authorised the transaction using chip and pin, Santander had not demonstrated what was displayed on the device, and it was reasonable for Mrs A to assume she was authorising what had been agreed with branch staff. As the expert party and under the Consumer Duty, Santander bore responsibility for clarifying and following customer instructions. The financial loss was calculated as the difference in exchange rates between what Santander should have charged and what the receiving bank charged, amounting to £1,275. Mrs A also suffered distress and inconvenience when funds fell short of requirements for a specific purpose.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website