Upheld: account administration error; incorrect account name change complaint against Lloyds Bank PLC

Decision detail

Summary

Company C complained that Lloyds Bank incorrectly changed the names on its business accounts in 2024, linking account 968 to C when it should have been linked to separate company S, despite eight years of correct transaction history and provision of correct company registration numbers. C claimed £400,000 in lost turnover, inability to obtain competitive lending, and significant staff time spent resolving the issue over twelve months. The ombudsman upheld the complaint regarding the bank error and inconvenience caused but rejected the financial loss claim due to insufficient evidence of causation, awarding £1,000 compensation and a written apology instead. The ombudsman clarified that personal distress to directors and staff could not be compensated as the complaint was brought on behalf of the limited company.

The Ombudsman's reasoning

The ombudsman accepted that Lloyds made an error in changing the account names and that this caused inconvenience to C over a prolonged twelve-month period. However, the ombudsman found insufficient evidence to support C's claim of £400,000 loss of turnover. The ombudsman noted that while finance applications were declined, the evidence did not demonstrate these were caused by Lloyds' error rather than lenders' own criteria changes. The ombudsman also clarified that the complaint was brought on behalf of C as a limited company, meaning personal distress to directors and staff could not be compensated. The ombudsman determined that £1,000 compensation for inconvenience, aligned with FOS guidelines for substantial impact cases, was fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website