Not upheld: gambling freeze functionality and merchant categorisation complaint against Lloyds Bank PLC

Decision detail

Summary

Mr M complained that Lloyds Bank failed to prevent gambling transactions totalling around £2,200 made to a casino merchant abroad in December 2025, despite having a gambling freeze in place. Lloyds explained that the merchant was not categorised as a gambling merchant in their system, so the freeze could not identify or block the transaction. The ombudsman found that Lloyds correctly applied the gambling freeze and that responsibility for merchant categorisation lies with merchants and their payment providers. Since Mr M authorised the payments and there were no suspicious circumstances requiring intervention, the ombudsman did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that Lloyds correctly applied the gambling freeze as designed. The merchant was not categorised as a gambling merchant, so Lloyds' system could not identify it as such. The responsibility for correct merchant categorisation lies with merchants and their payment providers, not with Lloyds. Lloyds cannot reasonably investigate every merchant worldwide or monitor what customers do with cash withdrawals or unidentified merchant transactions. The payments were authorised by Mr M, and under Payment Services Regulations, customers are liable for their own authorised payments. There were no suspicious circumstances that would have required Lloyds to intervene, as Mr M had no known gambling vulnerabilities, the spending was not unusually large relative to his account activity, and the transaction was made in person to a registered merchant.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website