Examples of complaints against banks (involving vulnerable

consumers) upheld by the Financial Ombudsman

(All cases taken from ‘Ombudsman news’, Financial Ombudsman Service)

127/2
consumer complains that bank held her liable for credit
card taken out during abusive relationship
Miss K, who had learning difficulties, had lived alone for several years with support from
her mother. Miss K then began a relationship with Mr I, who moved in with her.

Unfortunately, Mr I became abusive and the relationship broke down. When Mr I had
moved out, Miss K’s mother noticed letters from a debt collection company relating to a
credit card in Miss K’s name - which her mother hadn’t known Miss K had.

When Miss K’s mother asked her, Miss K said that Mr I had made her open a number of
accounts in her name - but that she hadn’t known what they related to.

Miss K’s mother contacted the credit card provider - a bank - to explain what had
happened. She explained that Miss K’s learning difficulties meant she wasn’t able to make
financial decisions alone - and hadn’t wanted to take out the credit card.
But the bank refused to write off or reduce the debts, arguing that Miss K had understood
what she’d been doing. Although Miss K’s mother complained, the bank wouldn’t change
their position - so she asked us to look at her daughter’s complaint.

complaint upheld

Miss K had clearly been through a very difficult time. While the bank couldn’t have
prevented that, we needed to decide if they’d responded fairly and reasonably to Miss K
and her mother’s concerns.

The bank told us that Miss K had phoned them to activate the credit card - and in their
view, hadn’t seemed “particularly stressed”. They also said that Miss K had a number of
other financial accounts, which it appeared she was managing well.

So they didn’t believe Miss K had been under pressure to take out the card - and felt she
understood she was responsible for the spending on it.

We asked Miss K’s mother to talk through her daughter’s circumstances. She sent us
specialist evidence about Miss K’s learning difficulties - which indicated that she had severe
difficulties understanding and dealing with information, particularly numbers.

Miss K’s mother explained that she’d always helped her daughter with her money - and
with living independently in general. For some accounts and services, there was a formal
authority in place - while for others the arrangement was more informal. But that was how
Miss K had so far kept on top of her finances.

Miss K’s mother was very upset at the suggestion that Miss K had authorised the
transactions on the card. She told us that Mr I had frequently threatened Miss K - hurting
her and damaging her property on a number of occasions, which had been reported to the
police.

When we asked the bank what they knew about this, they said that Miss K’s mother hadn’t
given them any evidence about Miss K’s situation. They said that if she had, then they
would probably have reached a different conclusion.

Looking at the bank’s file, however, we saw that Miss K’s mother had offered to provide
information about Miss K’s learning difficulties and personal circumstances. She’d been told
by the bank that this wouldn’t be necessary - as nothing would change their decision that
Miss K needed to pay the credit card bill.
Following our involvement, the bank agreed to write off the debt and to close the account.
We also told them to make sure that Miss K’s credit file wouldn’t be affected.

127/7
consumer complains that bank didn't offer enough
compensation for sending statements to ex-partner
Miss J had been living in a women’s refuge after leaving her abusive ex-partner - and was
under police protection.

After she moved out into her own flat, she phoned her bank to give them her new
permanent address. During the call, Miss J found out that copies of her statements had
just been ordered to the address where her ex-partner still lived.

When the bank said it was too late to cancel the statements, Miss J’s mother visited her
former home to try to recover them. Miss J’s ex-partner wasn’t there, but the statements
had been opened.

Miss J complained, saying that her ex-partner must have requested the statements for her
sole account - and that the bank didn’t have authority to send them. She said she hadn’t
changed her address with the bank while she was in the refuge, but didn’t need to because
she used online banking and wasn’t sent paper statements.

Miss J explained to the bank that she was extremely worried that her ex-partner could find
her from the information on the statements - and had informed the police about what had
happened.

Miss J made several further calls to try to establish how the statements had been sent, the
bank accepted that there could have been an error - and offered Miss J £150.

At this point, Miss J asked us to step in - saying the bank didn’t appreciate how serious
their mistake was.

complaint upheld

After the complaint was escalated to us, the bank said they wouldn’t have agreed to send
statements to Miss J’s ex-partner if he’d asked for them. So they said that Miss J must
have ordered the statements herself.

The bank said that, in any case, Miss J’s new address wasn’t on the statements - so no
harm could have been done.

We listened to the recordings of the calls Miss J had made to the bank. In our view, she’d
been clear and consistent in explaining that she believed her ex-partner had ordered the
statements - and the dangerous position she was now in.

During one call, she’d been transferred to a manager - who’d told her that the person
who’d authorised the statements to be sent was “in training” and wasn’t available to talk.
Miss J had also been told that there was “no reason to get angry” and had been asked why
she couldn’t just stay in the refuge if she was worried.

Given the potentially very serious consequences, we didn’t think Miss J would have ordered
statements to be sent to her previous address - and decided it was more likely that the
bank made an error.

We were also concerned at the way the bank had responded to Miss J’s concerns. We
pointed out that while Miss J’s current address hadn’t been on the statements, they did
show where she went, what she spent her money on and where she got her money.

Miss J’s ex-partner hadn’t known which town she’d moved to - but it would have been
quite easy for him to find out from the bank statements. On the advice of the police, Miss J
had since moved to another address.
Given everything we’d seen and heard, we agreed with Miss J that the bank hadn’t fully
recognised the impact the incident had had on her. Regardless of whether her partner had
actually traced her, the prospect of being found and harmed was clearly very distressing -
not to mention the inconvenience of sorting things out and moving once again.

In the circumstances, we told the bank to increase their offer to £1,000.

127/12
consumer complains that bank shouldn’t have allowed her
to withdraw savings to transfer to fraudsters
Mrs N was in her late eighties and her husband had recently died. One afternoon she
received a phone call from a man saying he was a police officer calling from a fraud
helpline - and that her bank was under investigation for fraud.

The police officer told Mrs N to withdraw her money from the bank and transfer it to a new
account the helpline had set up for her. He also told her to avoid talking to her bank as her
branch was under investigation. Following the call, to comply with the police officer’s
instructions, Mrs N withdrew £6,000 in cash over three separate trips to her bank - and
transferred the money at a local money-transfer shop.

Only after talking with a family member did Mrs N realised she’d been a victim of fraud -
and complained to her bank that they shouldn’t have let her withdraw the money.
However, the bank told her that they’d taken “appropriate steps to intervene” when she
made the withdrawals - so weren’t prepared to refund her money.

Devastated and embarrassed about the whole situation, Mrs N contacted us.

complaint upheld

We asked the bank what had happened each of the three times Mrs N asked to withdraw
her money. They said that their cashiers had questioned her “quite thoroughly”. But they
claimed there had been no reason for the cashiers to be overly concerned, as it hadn’t
seemed like a “typical scam situation”.

We asked the bank for a statement from the cashier who’d served Mrs N on each occasion.
However, they told us they couldn’t provide this - saying it would be “impossible to give an
accurate recollection” of what happened.

On the other hand, Mrs N was able to describe in great detail what had happened when
she took her money out. She said the cashiers had asked her why was withdrawing so
much money. She said that, each time, she’d told them it was for personal use - and
hadn’t been asked any more questions.

We pointed out to the bank that good practice guidance says when an older or vulnerable
customer wants to make an unusual cash withdrawal, the business should ask why it’s
needed. The business should also discourage large cash withdrawals - and if possible take
the customer to a private area to discuss this.

While the bank had asked Mrs N why she was making the withdrawals, it certainly didn’t
appear that the bank had questioned Mrs B “thoroughly”. And there wasn’t any evidence
that they’d warned her of the dangers of withdrawing so much cash, or spoken to her in
private.

In our view, given Mrs N’s circumstances, the bank should have done more to protect her -
especially since they had an awareness of current scams and fraudulent activity which
their customers, like Mrs N, wouldn’t necessarily have.

Looking at what had happened, we decided it wouldn’t be fair to tell the bank to refund the
first £2,000 Mrs N had withdrawn. In our view, this in itself wasn’t suspicious. The cashiers
had asked Mrs N what the money was for - and had no reason not to believe her answer.
But Mrs N had withdrawn another £4,000 in two trips over three days. The bank accepted
that this wasn’t something she’d ever done before. Given how unusual this behaviour was,
we took the view it should have alerted the bank that something could be wrong.

We decided that if the bank had done more at this point - following industry guidance and
good practice - it was likely the fraud would have come to light during Mrs N’s second trip
to the branch. And she wouldn’t have lost any more money.

So we told the bank to refund Mrs N £4,000, plus interest. We also told them to pay £500
to reflect the upset their actions had caused Mrs N - and the trouble she’d experienced
while trying to get her money back.

83/02
consumer in poor health seeks help from her bank
because of financial difficulties
Miss K contacted her bank for advice, as she was finding it increasingly difficult to meet
her financial commitments. She had a part-time job at her local supermarket and - largely
on grounds of ill-health - she had recently cut back on the number of hours she worked.
She had been suffering for some while from moderate clinical depression.

Miss K had a credit card and a current account with her bank. The current account was
overdrawn, and her total borrowing was around £5,500.

A member of staff at the local branch of Miss K's bank gave her a list of several not-for-
profit debt-advice agencies, together with a printed form headed 'Financial Statement'. He
told her to fill in the statement with details of her income and outgoings and to then take it
to one of the agencies on the list for 'verification'. He said that once she had done that,
she should bring the form back to the bank. The bank would then consider how it might be
able to help.

Some weeks later, Miss K returned to the bank. She said she had been to a debt-advice
agency and had found it helpful to talk through her situation with an adviser. However, the
adviser had said he was not in a position to verify her income and outgoings.

The member of staff she spoke to at her bank branch looked through her statement and
questioned her about some of the items of expenditure she had listed. He noted the
information she gave in reply and told her he would keep a photocopy of her statement,
for the bank's records.

However, he stressed that the bank was unable to take matters further until the statement
was 'properly verified'. It was therefore important that she found a debt-advice agency
that would do this for her.
Two months passed, during which Miss K tried unsuccessfully to obtain 'verification' of her
income and outgoings. Different members of staff from the bank rang her on several
occasions during this period, with further queries about the information in her financial
statement. She also received several standard letters from the bank requesting payments.
Each time she received one of these letters she rang the contact number and explained
that she was waiting for the bank's advice on how to manage her debt. She was told this
would be noted on her records. However, the 'demand' letters continued to arrive.

Eventually she wrote to the bank. She said its poor handling of the situation had caused
additional anxiety at a time when her state of health was already poor. And she
complained that the bank had completely failed to provide the practical advice and
assistance she had asked for.

The bank rejected the complaint, telling Miss K that her 'failure to cooperate fully' had
'limited' the extent to which it could help her. Miss K then came to us.
complaint upheld
We noted that Miss K had completed the details of her income and expenditure fully and
accurately, without needing any assistance from a debt-advice agency. We could see no
logical reason why the bank should have required 'verification' of her statement. The bank
held her current account and was far better placed than any third party to assess the
accuracy of the information she had provided.

There was no evidence to support the bank's assertion that Miss K had not been fully
cooperative. She had taken the initiative in approaching the bank for guidance as soon as
she realised her financial position was becoming difficult. And she had willingly answered
all the bank's questions about the details in her statement.

We noted that these questions had been put to her in a piecemeal fashion over several
weeks. And the bank did not appear to have kept any coherent record of its conversations
with her. There was nothing to indicate it had dealt with her in a sympathetic or positive
manner and it had made no real progress towards helping her manage her finances.

Following our involvement, the bank agreed to combine the credit card and overdraft
debts, to be repaid in interest-free instalments, reviewable every six months. This meant
that Miss K would be able to operate her current account without the complication of the
overdrawn balance, and its potential to incur charges and interest.

We also said that the bank should pay Miss K £500 as compensation for the significant
distress and inconvenience its handling of the matter had caused, at a time when it knew
she was in poor health.

98/6
consumer complains that bank failed to query signature
before paying cheques drawn on his account
Mr T complained that his bank had debited his current account for two cheques, totalling
£500, that he was certain he had never written or authorised. He only found out about the
cheques when looking through his bank statements, shortly after he had completed a
three-month prison sentence.

When he contacted his bank it said it would not have paid the cheques if there had been
anything 'suspicious' about them. However, Mr T insisted that the cheques could not have
been genuine and he asked the bank to send him copies.
After seeing the cheques, Mr T complained to the bank. He said it should have been
'obvious' that the signature on the cheques 'clearly differed' from his own. And he said that
as he had neither signed nor authorised the cheques, the bank should refund the money to
his account.
The bank refused to do this. It said that it had noticed a 'slight discrepancy' between the
signature on the cheques and Mr T's 'usual signature'. However, as Mr T's signature had
'often differed' during the course of its dealings with him, it had decided to honour the
cheques. Unhappy with that response, Mr T decided to refer his complaint to us.
complaint upheld
The bank confirmed that it retained copies of its account holders' signatures in order to
help prevent fraud. And it was clear from the bank's records that it had been concerned
about a discrepancy between the signature it held on file for Mr T and that on the two
cheques. The bank had tried several times to contact Mr T by phone to ask him about the
cheques. However, it had not been able to contact him. This was not surprising, as he had
been in prison at the time.

The bank had then paid the cheques, even though it knew there was a risk that they were
not genuine. In the circumstances, it did not seem fair to us that the bank should expect
Mr T to cover the loss caused by its decision to take that risk.

We said that the bank should refund Mr T's current account with the value of the cheques.
We said it should also pay whatever interest would ordinarily have accrued on the £500, if
the money had remained in his account.

98/7
consumer complains that bank misinformed him that a
cheque had cleared
Mr B, a 20-year-old student, decided to try and sell his car on a specialist trade website.
He advertised the car at a sale price of £1,000 and was very pleased when a prospective
buyer, Ms J, agreed to buy the car at the stated price.

Not long afterwards, she sent Mr B a cheque for £1,200. She told him she had sent the
extra £200 as she needed him to do her a favour. She said she was unable to collect the
car in person, so had asked a friend to collect it and look after it for a few weeks. She said
she had arranged to pay her friend £200 to cover his expenses - and she asked Mr B to
forward this sum to him, on her behalf.

Mr B paid in the cheque at the local branch of his bank. Four days later, he went back to
the branch and spoke to a cashier. He said he wanted to transfer some of the money to a
third party and needed first to be sure the payment had 'cleared'. The cashier told him the
£1,200 was 'cleared for withdrawal'.

Mr B then withdrew £200 in cash and, as requested by Ms J, took it to a money transfer

bureau and arranged for it to be sent on to the third party.

Later that same day the bank rang Mr B to tell him the cheque was fraudulent. This meant
that his account would not be credited with the £1,200 - though it would still be debited
for the £200 he had already withdrawn.

Mr B then realised that Ms J had never intended to buy the car and had tricked him into
parting with £200. He subsequently complained to the bank and asked it to refund that
sum to his account. He said he had only withdrawn the money because the bank had told
him it was 'safe' to do so.
complaint upheld
It was evident that Mr B had been the victim of a scam and that there was no likelihood of
his being able to get Ms J or her 'friend' to repay his £200.
The bank did not dispute Mr B's recollection of the conversation he had with the cashier
immediately before he withdrew the £200. However, it did not accept that the cashier had
misinformed him. Instead, it said that Mr M had 'failed to understand' that when the
cashier had said the cheque was 'cleared for withdrawal' - this did not mean that payment
was guaranteed.

We said that the bank should not have assumed that Mr B would understand the specific
technical meaning of this term, as used within the banking industry.

We thought it should have been evident that Mr B wanted to know if it was completely safe
to withdraw the money. In our view, the cashier should have explained that there was still
a possibility that the cheque might be returned unpaid.

In the circumstances, it seemed unlikely that Mr B would have withdrawn the money and
forwarded it to the third party if he had known this.

We said the bank should refund the £200 to Mr B's account, together with any charges and
interest he had incurred by being overdrawn. We said the bank should also pay Mr B £150,
in recognition of the inconvenience he had been caused.

108/14
business owner complains that bank did not do enough to
help when he made a mistake transferring money to his
business account
Mr G owned a small IT business. The business needed to pay a supplier £5,000 for some
equipment. Mr G's business had two accounts, and he needed to move money from one
account to the other to pay the supplier. He logged into his online banking account to
transfer the money. But when he went into the account he needed to use to pay the
supplier, the money he thought he had just transferred wasn't there. He realised that he
must have entered the wrong sort code. Mr G had no idea where the money had gone, and
his company was left out of pocket.
As soon as he realised what had happened, Mr G phoned his bank to report his mistake.
He spoke to several different people at the bank. Eventually he spoke to someone who
said they would try and track down the money. But because his business needed the
money immediately to pay the supplier, Mr G had to make a transfer from his savings
account to cover the money that had gone missing. This time, the payment went through
without any problems.

Mr G kept phoning his bank to find out whether it had found the missing money. Three
months later, the bank got in touch to say that it had found the money in a "suspense
account", and it returned to money to Mr G's business account a few days later.

Mr G complained to the bank about how long it had taken to get the money back. But the
bank said that Mr G should have been more careful when he had entered the sort code in
the first place - and that it hadn't done anything wrong.

Unhappy with this response, Mr G referred the complaint to us.

complaint upheld
When we spoke to Mr G, he accepted that he had entered the wrong sort code when he
had tried to transfer the money between his accounts. But he also explained to us that
because of his dyslexia, he often found it difficult to tell certain numbers apart - especially
when he was in a hurry.

We explained this to the bank. We also asked the bank why it had taken over three
months to find the money that had gone missing. But the bank couldn't explain why it had
taken so long.

We concluded that the bank should have done more to help Mr G when he had first got in
touch with them. We decided that the bank had, in effect, deprived Mr G's company of
£5,000 for three months - and we thought it was likely that the money would have been
part of the company's working capital. We told the bank to pay Mr G's company the
interest that would have accrued on the £5,000 during the three-month period.

74/13
the owner of a small farming business complained that his
bank failed to "stop" a cheque he had written on his
business account
A farmer, Mr H, complained to his bank about its failure to act on his instructions to "stop"
a cheque that he had issued on his business account. He had arranged to buy a second-
hand tractor, on the basis of information given to him by the seller.

Mr H had been unexpectedly called away from the farm on the morning the tractor was
delivered. However, he inspected it as soon as he arrived home. He then discovered it was
in a much poorer condition than he had been led to believe. He estimated that it was worth
no more than £500. But the cheque he had left for the seller when the tractor was
delivered was for £1,800 - the price they had agreed.

He said that he rang his bank that afternoon and instructed it not to pay the cheque.
However, the seller was able to cash the cheque without any difficulty a few days later.

When Mr H complained to the bank, it told him it had no record of his instruction to stop
the cheque and that he would, in any event, have been asked to put such a request in
writing. Since he had not done this, the bank said it was unable to uphold his complaint.

complaint upheld
The bank did not dispute that it had received a phone call from Mr H on the day in
question. And it insisted that he had not said anything during that call about "stopping" the
cheque.

The bank was unable to give a clear account of what it had discussed with Mr H on the
phone - and there was no evidence that it told him to put any instruction in writing.
We accepted that the bank would normally require written confirmation - particularly if the
sum concerned was a large one. But in the circumstances of this case, on balance, we
were satisfied from the evidence that Mr H had asked the bank to "stop" the cheque.
We considered that £1,800 would have been a reasonable price for the tractor, in
its advertised condition. And we accepted that Mr H was likely to get only £500 if he sold it
in its actual condition, as delivered. So we told the bank to refund his business account
with £1,300, and to add interest, back-dated to when the cheque was paid. We said the
bank should also pay Mr H £200 for the inconvenience he had been caused.