Upheld: Account closure without notice complaint against Nationwide Building Society

Decision detail

Summary

X, a minor, received a £5,000 gift cheque from his grandfather following his grandmother's death. Nationwide blocked the account due to fraud concerns from the paying bank and, after failing to reach X by phone during school hours on one occasion, issued a notice of account closure. Nationwide requested bank statements from X's grandfather as evidence, which he was unwilling to provide given the accusatory nature of the request. The block was eventually lifted after alternative evidence was provided. The ombudsman found Nationwide's £50 compensation inadequate, as it failed to account for X's age, the sensitive circumstances, and the firm's failure to make adequate contact attempts before issuing the closure notice. The ombudsman ordered £250 compensation instead.

The Ombudsman's reasoning

While Nationwide was not unreasonable in blocking the account and investigating the £5,000 payment, it was too hasty in issuing a closure notice without making adequate effort to contact X, particularly given he was a minor likely to be unavailable during school hours. Nationwide should have anticipated that X's grandfather might refuse to provide bank statements and should have discussed alternative evidence beforehand. The firm failed to adequately account for X's age and the distressing circumstances of receiving a payment following his grandmother's death. The £50 compensation only addressed a missed phone call and did not properly reflect the distress and inconvenience caused by the premature closure notice.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website