Not upheld: Account closure without notice complaint against Lloyds Bank PLC

Decision detail

Summary

Mr M complained that Lloyds Bank PLC unfairly closed his current account and demanded repayment of an unauthorised overdraft. Mr M had been in a cycle of debt for ten years and had recently retired due to ill-health, experiencing pension payment issues. His overdraft exceeded the agreed £3,000 limit in February 2025, and despite receiving letters from Lloyds in April 2025 warning of account closure, the balance remained above the limit from June 2025 onwards. Mr M attempted to contact the bank by email due to health difficulties preventing phone contact, but his emails did not reach the correct department. The ombudsman found the bank acted fairly in closing the account on 21 October 2025, as Mr M had not made meaningful proposals to address the unauthorised overdraft and there was no realistic prospect of repayment.

The Ombudsman's reasoning

The ombudsman applied the principle that banks have commercial discretion to decide whether to provide banking services. Given that Mr M had exceeded his overdraft limit for several months with no realistic prospect of repayment, and had not made meaningful proposals to address the unauthorised overdraft despite receiving several letters with reasonable notice, the bank's decision to close the account and demand repayment was reasonable. While the ombudsman acknowledged Mr M's health difficulties and the lack of email contact options in the letters, these factors did not render the bank's actions unfair in the circumstances.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website