Partially upheld: administrative error and account suspension complaint against Amazon Payments UK Limited

Decision detail

Summary

Mr W, a sole trader selling on Amazon, requested in 2021 that his seller account disbursements be sent to a newly incorporated company L's bank account. APUK processed the change but incorrectly verified the account as a limited company in its internal systems. In autumn 2023, during a KYC review, APUK identified the entity mismatch and suspended the account for ten days while attempting to resolve the discrepancy. The account was ultimately confirmed as a sole-trader account and restrictions were lifted. Mr W complained that APUK's 2021 verification error caused the complications and contributed to company L's eventual closure. The ombudsman partially upheld the complaint, finding APUK partly responsible for the distress and inconvenience caused by the verification error and account suspension, and awarded £500 compensation.

The Ombudsman's reasoning

The ombudsman found that APUK made a verification error in 2021 when it changed the bank account details without properly verifying that the seller account status matched the entity receiving funds. While Mr W did not formally request a change of ownership and bore some responsibility for not formally transferring the account, APUK's error contributed to the complications that arose in 2023. The KYC review and subsequent suspension caused distress and inconvenience to Mr W. However, the ombudsman could not consider losses to company L (a separate legal entity) or the impact on Mr W as a director. The ombudsman determined APUK was only partly responsible for the difficulties, as a KYC review would likely have been triggered by any attempt to transfer the account given Mr W's existing loan.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website