Not upheld: direct debit indemnity claim handling; service delays; poor communication; rejection of claim complaint against National Westminster Bank Public Limited Company (NatWest)
Financial Ombudsman decision DRN-6409894 of 2026-06-07T00:00:00+00:00. direct debit indemnity claim handling; service delays; poor communication; rejection of claim complaint against National Westminster Bank Public Limited Company (NatWest). Outcome: Not upheld.
Decision detail
| Reference | DRN-6409894 |
|---|---|
| Decision date | 2026-06-07T00:00:00+00:00 |
| Firm | National Westminster Bank Public Limited Company (NatWest) |
| Product | Current account |
| Claim type | direct debit indemnity claim handling; service delays; poor communication; rejection of claim |
| Outcome | Not upheld |
| Remedy | No additional remedy ordered. The £150 compensation already paid by NatWest (£100 for delays and poor communication, plus £50 goodwill gesture) was deemed fair and reasonable and consistent with FOS guidelines for non-financial loss in comparable circumstances. |
Summary
Mrs S complained to NatWest about its handling of a direct debit indemnity claim for over £6,000 in payments to company B collected between 2018 and 2023. She alleged B had no valid authority or contract to collect the payments and sought a refund under the Direct Debit Guarantee. Mrs S experienced significant delays (29 days instead of the promised 5 working days) and poor communication, requiring her to repeatedly contact NatWest for updates. NatWest rejected the claim as falling outside the Direct Debit Guarantee remit (being a contractual dispute rather than a payment error) and paid £150 compensation for service failures. The ombudsman found NatWest's rejection of the claim was fair and reasonable, as the Guarantee does not cover contractual disputes, and determined the £150 compensation was appropriate for the delays and poor communication experienced.
The Ombudsman's reasoning
The ombudsman found that while NatWest breached its own SLA by taking 29 days instead of 5 working days to process the claim, and provided poor communication requiring Mrs S to repeatedly chase for updates, the £150 compensation already paid was fair and reasonable for the non-financial loss (inconvenience and upset). Critically, the ombudsman determined that the direct debit indemnity claim itself was properly rejected because Mrs S's complaint was fundamentally a contractual dispute (arguing B had no valid authority or contract) rather than an error in the payment itself (wrong date, amount, or frequency). The Direct Debit Guarantee only covers payment errors, not contractual disputes about liability. The ombudsman also noted that Mrs S's delay in raising the issue (nearly five years after payments began) was unusual and called into question the validity of the claim.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| National Westminster Bank Public Limited Company (NatWest), all decisions | 112 | 8% |
| Current account, all decisions | 45,590 | 19% |
Source
Read the original decision on the Financial Ombudsman Service website