Not upheld: payment not received / service failure in investigating payment complaint against Lloyds Bank Plc

Decision detail

Summary

Mr P complained that a payment from his father sent to his Lloyds account was not received and that Lloyds provided poor service when investigating. The payment failed to credit because the sending bank provided an incorrect BIC, causing the funds to be applied to a different account at another branch. While Lloyds acknowledged it could have handled the investigation better and provided confusing information, the ombudsman found that Lloyds was not responsible for the sending bank's error and that its payment processing practices were in line with industry standards. Lloyds had already paid £300 compensation and arranged for the funds to be credited to Mr P's account. The ombudsman did not uphold the complaint, finding the compensation fair and reasonable.

The Ombudsman's reasoning

The ombudsman agreed with the investigator that the payment failed to reach Mr P's account due to an error made by the sending bank (incorrect BIC), not Lloyds. While Lloyds' service could have been better and it provided confusing information, the root cause was not Lloyds' responsibility. The ombudsman found that Lloyds' practice of not checking beneficiary names against BIC and IBAN combinations is in line with standard industry practice. The ombudsman acknowledged that Lloyds could have begun its investigation sooner and that it showed flexibility by crediting Mr P's account as an exception. The £300 compensation already paid was deemed fair and reasonable for the service shortfalls.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website