Not upheld: fraud marker registration and account closure complaint against Starling Bank Limited

Decision detail

Summary

Miss M, director of company W, complained to the FOS about Starling Bank's decision to close W's business account and her personal account, and to register negative fraud markers on the National Fraud Database. Between March and June 2024, W's account received several payments that were subsequently reported as fraudulent by third-party banks. When Starling requested documentary evidence of Miss M's entitlement to these funds, she claimed they were for concierge services but failed to provide supporting documents such as invoices or contracts despite multiple requests. The ombudsman upheld Starling's actions, finding that the bank had met the legal test for registering a fraud marker by establishing reasonable grounds for believing fraud had occurred and that Miss M had deliberate complicity, evidenced by her inability or unwillingness to provide adequate documentation.

The Ombudsman's reasoning

The ombudsman applied the legal test for registering a fraud marker, which requires reasonable grounds to believe that fraud has been committed and clear, rigorous evidence of deliberate complicity. The ombudsman found that Starling had met this test because: (1) fraud reports were received from third-party banks; (2) Starling repeatedly requested documentary evidence from Miss M; (3) Miss M failed to provide adequate supporting documents such as invoices, contracts, receipts or booking confirmations that would be reasonably expected from a business director; and (4) the limited material Miss M eventually provided lacked provenance and relevance. The ombudsman concluded that the absence of proper documentation, despite multiple opportunities to provide it, demonstrated sufficient grounds for the marker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website