A leading story on how the Financial Ombudsman agreed to set things right for a Lloyds bank customer.
A recent complaint DRN-3389800 against Lloyds Bank PLC has been resolved, as a customer, Mr G, was unhappy with a Cifas marker being applied against his name. This is the story of how this complaint was addressed and resolved.
Mr G had been a long-time customer of Lloyds Bank, but in August 2020, the bank received reports from a third-party bank that four payments had been attempted to Mr G’s account without authorization. Thankfully, none of the transactions were successful in reaching Mr G’s account. However, as a result of this information, Lloyds decided to place blocks on Mr G’s account.
Mr G contacted Lloyds to report the unauthorized transactions and confirmed that he was not expecting any funds into his account, in addition to stating that no one else had access to his account. He also confirmed that he had possession of his bank card.
Despite this, Lloyds decided to close his account, providing 65 days’ notice, and loaded a Cifas marker against his name for allegedly misusing his banking facility.
It wasn’t until the marker started to impact Mr G’s other financial accounts that he became aware of its existence. He promptly complained to Lloyds and requested that the marker be removed. Lloyds, however, looked into the complaint and rejected it, stating that Mr G had been logging into his account around the same dates as the attempted payments.
They also argued that it would be unlikely for a fraudster to credit Mr G’s account with stolen funds if they could still access them.
Mr G was not satisfied with Lloyds’ response and escalated his complaint to the Financial Ombudsman Service. Upon reviewing the evidence presented by both parties, the Investigator concluded that the Cifas marker had not been applied correctly.
There was insufficient evidence to implicate Mr G in the criminal activity reported, and it was noted that he did not log into his account any more than usual on the day of the attempted transactions. The Investigator recommended that Lloyds remove the marker and pay £500 in compensation for the impact caused.
Lloyds accepted the Investigator’s recommendations, but Mr G felt that the compensation amount did not fully reflect the severity of the situation. As a result, the matter was passed onto Ombudsman Stephen Westlake for a final decision.
After considering all the evidence and arguments, Ombudsman Westlake agreed that the Cifas marker had been incorrectly applied and Lloyds had already removed it. However, Mr G argued that the impact of the marker was significant, and he deserved a higher compensation amount to reflect this.
He provided evidence of the various ways in which the marker had affected him, including being denied a bounce-back loan for his business, the closure of several financial accounts, and being rejected for other financial applications.
Ombudsman Westlake acknowledged that the impact of a Cifas marker can be significant, but calculating it can be a complex task. While it can be taken into consideration by businesses, it is their responsibility to ensure it is applied accurately before making any decisions.
He noted that Mr G’s ability to obtain a bounce-back loan could not be proven as a result of the declined application, and it would be unfair to direct a business to pay for a loss without evidence.
Ultimately, Ombudsman Westlake upheld the complaint and directed Lloyds Bank PLC to pay Mr G £500 in compensation for the distress and inconvenience caused by the incorrectly applied Cifas marker.
He acknowledged that while there was clearly an impact, not all the declined applications could be attributed to the marker, and Mr G had other adverse information recorded on his credit file that affected his credit score.
With the marker now removed and the compensation amount settled, the complaint against Lloyds Bank PLC has been successfully resolved.
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