Not upheld: ISA / savings administration complaint against Shawbrook Bank Limited

Decision detail

Summary

Mr B and Dr B held a 1 Year Fixed Rate Bond with Shawbrook earning 5.7% AER that matured on 6 September 2024. Their funds were automatically transferred to a Matured Funds account earning only 0.10% AER, which they did not discover until January 2025. They complained that Shawbrook had not notified them of the maturity and the low interest rate. Shawbrook had sent three notification letters via its online portal in August and September 2024 explaining the maturity and the applicable rate, but Mr B and Dr B did not access these messages. The ombudsman found that Shawbrook's communications were clear and complied with regulatory requirements, and that the use of the online portal was standard practice for a digital bank. The ombudsman upheld Shawbrook's offer of £1,510 as fair compensation, representing 50% of the interest difference between the Matured Funds account and a 5% Easy Access account, reflecting both the customers' loss and their responsibility for not reading the notifications.

The Ombudsman's reasoning

The ombudsman found that Shawbrook's Key Product Information clearly explained that funds would be moved to a Matured Funds account at maturity with the interest rate to be confirmed in writing. While the specific rate was not disclosed at product inception, this was reasonable given potential rate changes over the year. The ombudsman determined that Shawbrook's use of the online portal for notifications was standard practice for a digital bank and consistent with the general terms and conditions. Although Mr B and Dr B preferred email communication, Shawbrook had no prior knowledge of their email access difficulties and was not obligated to deviate from its standard communication method. The ombudsman noted that the notifications were clear and factually correct, and that Mr B and Dr B's failure to read them represented a choice for which Shawbrook should not be held responsible. The 14-day notice period provided complied with FCA requirements. The ombudsman concluded that Shawbrook's offer of 50% of the interest difference using a 5% comparator rate was fair as it reflected the customers' concerns while acknowledging they could have mitigated losses by reading the communications.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website