Not upheld: direct debit indemnity claim rejection and poor communication complaint against The Royal Bank of Scotland Public Limited Company (RBS)

Decision detail

Summary

Miss D and Mr M complained to RBS about monthly direct debit payments to company A that they claimed were unauthorised, requesting a refund through a direct debit indemnity claim. RBS rejected the claim, explaining that disputes about authorisation due to lack of a signed mandate are not covered by the Direct Debit Guarantee. Miss D and Mr M also complained about poor communication from RBS, including conflicting information, an error in closing their initial claim, and failure to provide contact details. RBS partially upheld the complaint and offered £100 compensation for poor communication. The ombudsman found that RBS acted fairly in rejecting the DDIC and that the £100 compensation was appropriate for the service shortfalls, as the poor communication did not affect the outcome of the claim.

The Ombudsman's reasoning

The ombudsman found that RBS acted fairly in rejecting the DDIC because disputes about liability to pay a direct debit due to absence of a signed contract are not covered under the Direct Debit Guarantee. The Guarantee only applies where an error has been made in the payment itself (wrong date, amount, or frequency), not disputes about authorisation based on lack of a signed mandate. However, the ombudsman acknowledged that RBS provided poor communication, including conflicting information, an avoidable error in closing the initial claim, and failure to provide requested contact details. The £100 compensation offered by RBS was deemed appropriate for the non-financial loss (inconvenience and upset) as the poor service did not affect the outcome of the claim.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website