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

Decision detail

Summary

Mr O complained that Lloyds Bank Plc unfairly closed his account in August 2025 following a CIFAS fraud marker registered against his name by another bank. Mr O explained the marker was a misunderstanding arising from him being manipulated into receiving payments for another person. The marker was subsequently removed and Lloyds restored his banking facilities. Lloyds acknowledged delays in their complaint response and offered £140 compensation. The Ombudsman found that Lloyds acted reasonably based on the information available at the time and did not uphold the complaint, determining the £140 compensation for service delays was sufficient.

The Ombudsman's reasoning

The Ombudsman found that Lloyds' account terms and conditions permitted closure in certain situations. Based on the information available to Lloyds at the time (the CIFAS fraud marker), the decision to close the account and restrict functionality was reasonable and fair. The fact that Lloyds later reversed the decision when the situation was clarified does not mean the original decision was wrong or unfair. The inconvenience caused to Mr O did not arise from an error or unfair treatment by Lloyds, so compensation beyond the £140 already offered for delayed complaint response was not warranted.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website