Partially upheld: inadequate advice on remortgage process and direct debit management complaint against Lloyds Bank PLC

Decision detail

Summary

Miss C and Mr W complained that Lloyds Bank PLC failed to properly advise them during their remortgage about their direct debit with the previous lender. An unexpected payment was taken by the previous lender around remortgage completion, which was higher than their regular payment and caused them distress while on holiday, though it was refunded within 12 working days. The Ombudsman found that while Lloyds was correct to advise not cancelling the direct debit and was not responsible for the previous lender's actions, the adviser should have clearly communicated that a payment was likely and would be refunded after redemption. The Ombudsman upheld Lloyds' offer of £300 compensation as fair, finding it adequately compensated for the short-term distress and inconvenience caused by the lack of clear information.

The Ombudsman's reasoning

The Ombudsman found that while Lloyds was correct to advise not cancelling the direct debit (to avoid missed payment records) and was not responsible for the previous lender's actions, the adviser should have clearly communicated that a payment was likely to be taken and would be refunded after redemption. This would have allowed Miss C and Mr W to budget accordingly and avoid the distress of an unexpected overdraft while on holiday. The £300 compensation was deemed fair given the short duration of distress and inconvenience, as the funds were refunded within 12 working days.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website