Upheld: Account administration errors complaint against TSB Bank plc

Decision detail

Summary

Mr M complained that TSB ignored his change of address letters while he was imprisoned and allowed an unauthorized direct debit payment of £1,244.50 to his energy supplier, resulting in a £1,232.08 overdraft on an account with no overdraft facility. Mr M had cancelled the original direct debit in April 2024, and his energy supplier set up a new one in August 2024 without authorization or notification. TSB offered £300 compensation but refused to write off the overdraft. The ombudsman upheld the complaint and required TSB to refund Mr M under the direct debit indemnity guarantee scheme, with the refund clearing the overdraft and any remainder credited to his account.

The Ombudsman's reasoning

The ombudsman found that Mr M's energy supplier set up a new direct debit in August 2024 without proper authorization or notification to Mr M. Given that Mr M no longer owned or rented the property for which electricity was being charged, and that the energy supplier failed to notify him of the new direct debit or the amount to be taken, the ombudsman was satisfied that Mr M's claim under the direct debit indemnity scheme would likely succeed. The ombudsman considered it fairer for TSB to pursue the indemnity claim, allowing Mr M's energy supplier to pursue him directly rather than Mr M owing TSB and being chased by collection agents.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website