Not upheld: alleged unauthorised payments / account mandate breach complaint against Lloyds Bank PLC

Decision detail

Summary

Mr M, on behalf of trust C, complained that Lloyds permitted two £4,000 payments in 2021-2022 without the required second signatory, allegedly causing the trust to incur £27,000 in legal fees and tax liability. Lloyds investigated and found no evidence of mandate breach. The ombudsman found that while records were limited due to the passage of time, Mr M failed to provide persuasive evidence that the second signatory was absent, and on balance of probabilities concluded the payments were likely properly authorised. The ombudsman rejected Mr M's claimed losses due to lack of evidence and his apparent abandonment of the £27,000 claim. However, the ombudsman upheld that Lloyds' four-month investigation delay caused inconvenience and ordered £120 compensation for this delay.

The Ombudsman's reasoning

The ombudsman found that given the passage of time since 2021, records were limited and memories had faded. While Lloyds could not provide definitive proof that two signatures were obtained, Mr M also failed to provide persuasive evidence that the second signatory was absent. The second signatory's statement was inconsistent with Mr M's claim that he was out of the country. On the balance of probabilities, the ombudsman concluded it was more likely than not that the two £4,000 transfers were completed with authority from two signatories. Additionally, Mr M provided no evidence for his claimed losses of £27,000 and appeared to abandon this claim after the Investigator's findings, which undermined the credibility of his complaint.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website