Upheld: Account closure without notice complaint against Barclays Bank UK Plc

Decision detail

Summary

Mr A held two dormant accounts with Barclays that received large incoming payments in 2017. Barclays issued closure notices and eventually moved the funds to an internal sundry account. Mr A attended branch in August 2022 but did not contact Barclays again until March 2025 to complain about the closure and delayed access to funds. Barclays maintained the closure was fair due to regulatory obligations but acknowledged delays and offered interest payments plus £200 compensation. The ombudsman upheld the complaint, finding the account closure lawful and the compensation offer fair, as Barclays applied interest at the rate Mr A would have received and Mr A could have pursued matters more urgently from 2022 onwards.

The Ombudsman's reasoning

The ombudsman found that Barclays acted fairly in closing the accounts as it had legitimate regulatory and legal obligations to monitor transactions and establish the origin of funds. The account terms and conditions permitted closure with 62 days' notice, which was provided. However, the ombudsman acknowledged that delays occurred in returning the funds and that Barclays should have taken proactive steps to help Mr A access his funds. The ombudsman considered Barclays' compensation offer fair because it applied interest at the rate Mr A would have received had funds remained in the accounts, meaning no financial disadvantage. The ombudsman rejected applying interest for the entire period from 2020-2025, finding that Mr A could have taken proactive steps from August 2022 onwards and had a reasonable expectation to provide forwarding bank details if funds were urgently needed. The £200 distress and inconvenience award was considered fair given that the account closure was lawful and Mr A did not pursue matters with urgency.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website