Barclays Bank UK PLC · DRN-2946655

The complaint A company, which I’ll refer to as “S”, complains about the way Barclays Bank UK PLC dealt with its request to borrow funds under the Coronavirus Business Interruption Loan Scheme and Bounce Back Loan Scheme. What happened S wanted to apply for a Coronavirus Business Interruption Loan (CBIL) and contacted Barclays about this on 26 March 2020, a few days after the Scheme was launched. When speaking to a Barclays adviser, Mr and Mrs B explained that they were looking to borrow £36,000 under the CBIL Scheme. The adviser said that they could only process an application of up to £25,000 – loans for larger amounts were dealt with by a different department, and someone would have to call Mr and Mrs B back separately. Mr B asked if they could submit an application for the £25,000, and then arrange to borrow the further amount when receiving a call back. Barclays agreed and an application was started. During the application, there was an issue with the account mandate for S. So Mr and Mrs B were transferred to a different department to update some of the information held by the bank. The issue was rectified and the application proceeded. It transpired that the bank had taken Mr and Mrs B through an application for a standard business loan, rather than a CBIL. On realising this, Mr and Mrs B cancelled the application as they only wanted a CBIL and had thought that’s what they’d applied for. So matters were left on the basis that a manager would call Mr and Mrs B to proceed with a CBIL application. Barclays called Mr and Mrs B on 14 April to obtain some information in preparation for the CBIL application. Mr and Mrs B declined to provide anything at this time, wanting instead to speak directly to a manager. A manager then called on 21 April, asking for information including accounts and forecasts in order to assess the CBIL application. S provided this on 28 April. Barclays subsequently redirected S to the Bounce Back Loan Scheme that was launched on 4 May 2020. Loans of up to £50,000 could no longer be obtained under the CBIL Scheme. Bounce Back Loan applications were done online, but when Mr and Mrs B tried to submit S’s request they were unable to do so. This was because of discrepancies in information held by the bank and that recorded at Companies House. But by the time this was identified, Mr and Mrs B no longer wanted the loan from Barclays as S had obtained one elsewhere. Mr and Mrs B are unhappy with how long it took to progress their initial CBIL request and the misunderstandings that led to an application for a different loan altogether. They also think that Barclays should’ve had all the information it needed in order to allow a Bounce Back Loan application immediately. When Mr and Mrs B initially complained to Barclays, the bank didn’t think it had done anything wrong. It thought its adviser had been clear about what the initial application was for and that Mr and Mrs B had misunderstood her. The bank also said that an

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unprecedented number of enquiries for loans under the CBIL Scheme had led to the long waiting times on its phonelines, and that its application process – through which Mr and Mrs B’s request had been progressed – had been designed to alleviate these. But in response to a subsequent complaint following the abortive Bounce Back Loan application, Barclays accepted that there had been some confusion and offered S compensation of £75. The bank maintained, though, that the Bounce Back Loan application couldn’t proceed as the details it held for S didn’t match those registered with Companies House. Mr and Mrs B remained unhappy and referred the matter to us. They said that they wanted the bank to refund five years’ worth of account charges. One of our investigators reviewed the complaint and thought it should be upheld. In summary, she said:  Having listened to recordings of Mr and Mrs B’s calls with the bank, she didn’t think Barclays had made it clear that it was progressing an application for a standard business loan rather than a CBIL.  Mr and Mrs B had been unable to progress the Bounce Back Loan application due to discrepancies in the bank’s records. But they’d recently received assurances from Barclays that its information about S was up-to-date. So she thought this delay ought to have been avoided.  While Barclays’ errors had caused delays in the progress of S’s loan applications, there had also been occasions on which Mr and Mrs B hadn’t cooperated with the bank. So to put things right, our investigator recommended that Barclays increase its compensation offer to £250 to better reflect the inconvenience that S had been caused. She also thought that the bank should remove any record of the credit check it had carried out during the erroneous loan application. Barclays accepted our investigator’s view, but Mr and Mrs B didn’t. They still wanted the bank to refund five years’ account charges on the basis that they could’ve obtained free business banking elsewhere – but had remained with Barclays only to then be let down in their time of need. They also said that delays in progressing the loan application had caused S to lose business, as without the funds it had been unable to purchase the equipment needed to fulfil orders. So they asked that an ombudsman review the complaint, and it was passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’ve reached the same conclusions as our investigator and for largely the same reasons. I’ll explain why. Mr and Mrs B are unhappy at how long it took to begin the process of applying for a CBIL. I can appreciate the frustration they experienced at the time – evidently they spent a number of hours waiting on the phone before getting through to an adviser to start an application. And I recognise the urgency of their request – the very purpose of the CBIL Scheme itself was to support businesses like theirs in dealing with the impact of the coronavirus pandemic. At the same time though, I think it is also fair to bear in mind the unprecedented circumstances of the time – and the impact these would’ve had on the bank itself. In addition to the large volume of loan applications and associated calls and contact, the bank was also

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having to deal with the consequences of the pandemic – which would all have affected the level of service it could provide. So in and of themselves, I don’t think the wait times that S experienced at the outset were unreasonable. However, I do think there were errors on Barclays’ part in how it handled the request for a CBIL once Mr and Mrs B were in touch with an adviser. I’ve listened to recordings of Mr and Mrs B’s conversations with Barclays and have heard that they were clear in their request to apply for a CBIL. The adviser proceeded to take them through an application for a different type of loan altogether – and didn’t make this sufficiently clear. So I can see why Mr and Mrs B assumed that a CBIL application was underway. S was therefore inconvenienced as a result of its directors engaging in an application for a loan that wasn’t required. I understand the process also involved a credit check, so it’s right that this should be removed from S’s record as the application shouldn’t have proceeded. Thankfully, the bank’s error was identified swiftly – in a further call the following day (27 March 2020). So as things turned out, the error only delayed the progress of Mr and Mrs B’s CBIL request by one day. Once it was then identified that Mr and Mrs B wanted to apply for a CBIL, Barclays logged a request for a lending manager to call them in line with its process. From the records I’ve seen, it then took until 25 April for a lending manager to contact Mr and Mrs B. However, in the intervening period, an adviser did call with a view to completing some preparatory steps (and thereby expediting the process) – but Mr and Mrs B requested that the matter be dealt with by a manager. So while there was some delay on Barclays’ part, it’s also fair to say that things could’ve progressed more quickly if Mr and Mrs B had cooperated with the bank at this point. Shortly after the lending manager was in touch, the government was preparing to launch a new loan scheme to support businesses – the Bounce Back Loan Scheme. This was to provide faster access to loans of £50,000 or under – and these amounts could no longer be borrowed under the CBIL Scheme. So Barclays correctly redirected S to the Bounce Back Loan Scheme to pursue its application. Access to the Scheme was only available from 5 May 2020. However, S was unable to apply for a Bounce Back Loan as the bank found its records didn’t match those held at Companies House. Like our investigator, I think this ought to have been avoided. Mr and Mrs B had already been required to update information as part of the abortive loan application, and given a CBIL application had also been initiated I think all of this ought reasonably to have been resolved before this point. So a further delay ensued here, with S put to some further inconvenience in trying to sort things out. Ultimately, Mr and Mrs B decided to apply elsewhere for a Bounce Back Loan for S in late May and I’m pleased to see that they were successful. But their attempt to access support under the government-backed loan schemes took longer than it ought to have done. Mr and Mrs B say that the delay caused S to lose business, which we’ve asked them to evidence. They’ve provided four quotes, issued to potential clients between 9 April and 26 May 2020, of work they say they couldn’t take on until S obtained the loan. I’ve carefully considered what they’ve said and provided. But I’ve not seen enough to show that the delays caused by errors on Barclays’ part meant that S missed out on this business. There might be a number of reasons why the work didn’t go ahead – there is, for example, no evidence that the quotes were accepted. And as set out above, I’ve not found the entire delay between the initial request for funding (26 March 2020) and S obtaining a loan in late May to have been the result of errors on the bank’s part. So I don’t think Barclays needs to pay S any compensation in this respect.

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I’ve also considered what Mr and Mrs B have said about the account charges. I understand their disappointment in the service they received, although as I’ve outlined above I don’t think that the bank is wholly responsible for the delay in S obtaining the funding it required. But the charges were applied for a separate service altogether, of which S received the benefit (i.e. the use of the bank account). So I don’t think a refund of these charges would be a fair remedy for the problems S experienced in relation to its loan application. Rather, it is a matter of compensating S for the inconvenience it was caused by shortcomings in the service provided by Barclays. Most notably, S was put through a loan application in error and was unable to access the Bounce Back Loan Scheme when it ought to have been available. And it was engaged in more contact and correspondence about the matter than ought to have been necessary. I should also add that I appreciate the matter caused some stress and worry to Mr and Mrs B personally, but as the complaint is brought by S that isn’t something I can compensate them for. All I can require Barclays to compensate S for is the inconvenience it was caused and for that, I also think that £250 is fair in the circumstances. My final decision I uphold this complaint and require Barclays Bank UK PLC to pay S compensation of £250 and remove the record of its credit check conducted during the abortive loan application, if it’s not already done so. Under the rules of the Financial Ombudsman Service, I’m required to ask S to accept or reject my decision before 25 August 2021. Ben Jennings Ombudsman

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