Not upheld: Account restriction and regulatory compliance - US person status verification complaint against Financial Administration Services Limited (Fidelity)

Decision detail

Summary

Mr W complained that Fidelity unfairly restricted his son's Junior ISA after discovering the son was born in the USA. Fidelity had accepted the account opening based on Mr W's declaration that his son was not a US person for tax purposes, but later reviewed the account and requested documentation to verify this status. The ombudsman found Fidelity was entitled to both accept the initial self-certification under FACTA rules and to later request verification documentation, which was reasonable and proportionate. While the ombudsman agreed Fidelity sent the restriction notice to the wrong address and responded slowly to the initial query, it found the £100 compensation already offered fairly reflected the inconvenience caused. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Fidelity was entitled to accept the account opening based on Mr W's self-certification that his son was not a US person, as permitted under FACTA. However, Fidelity was also entitled to review that position later and request documentation to verify the status given the son's US birthplace. The requested documents were reasonable and proportionate, and Fidelity showed flexibility in what it would accept. The ombudsman agreed the notification letter was sent to the wrong address and the response time was slow, but found these service failures caused only minor inconvenience and the £100 offered was fair compensation. The restriction itself was justified by Fidelity's compliance obligations.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website