Lloyds Bank Plc · DRN-6199652

The complaint Mr M complains that Lloyds Bank Plc won’t refund the money he says C lost as a result of a series of transactions he didn’t make or agree to. Mr M is represented throughout, but for ease of reading, I’ll refer to Mr M or C throughout the decision. Mr M has raised similar complaints for his business account and other accounts with other banks. These have been addressed under separate references. What happened Both parties are aware of the circumstances of the complaint, so I won’t repeat them all here. But briefly, Mr M disputed numerous payments totalling £58,469.80 made from C’s account throughout 2023, 2024 and 2025 and using different bank cards. He said he raised the disputes with Lloyds, but the bank treated him unfairly. Mr M said when he visited his local branch, the staff were rude and mentally and physically abused him when he asked for a refund of the payments and he had to call the police. Mr M also said as a result of the bank’s refusal to refund the disputed payments, C hasn’t been able to pay its running costs such as rent and salaries and therefore has lost clients and is in the verge of closing. He said Lloyds gave him a months’ notice that it would be closing his accounts, which was unfair as he hadn’t breached any of the terms and conditions of his account. Unhappy with Lloyds actions, Mr M complained to the bank. Lloyds didn’t uphold C’s complaint. It said when Mr M had visited the local branch, fears had been raised for its staff’s safety, and it was satisfied its staff hadn’t acted unfairly. It said it had undertaken a review and made the decision to close C’s accounts in line with its terms and conditions. Lloyds also said it had investigated the payments Mr M said were fraudulent on C’s account. However, at the time of the online payments, Mr M had been logged on to C’s online banking, and he’d told the bank no-one else knew the password. It also wasn’t persuaded there was sufficient explanation for how a fraudster could have accessed Mr M’s devices to make payments. Lloyds said it had also reviewed the ATM transactions and there wasn’t sufficient evidence to say they were fraudulent. It declined to refund the payments disputed by Mr M. Our investigator didn’t recommend the complaint be upheld. He said Lloyds had provided some confidential information with our service which he wouldn’t be able to share, and having considered this and Mr M’s testimony he didn’t think Lloyds had behaved unreasonably by not refunding C. He said based on the evidence available, he wasn’t persuaded the transactions disputed by C were fraudulent. He didn’t think it would be reasonable to ask Lloyds to reimburse C. Mr M didn’t agree. He said Lloyds had changed his address without his authority and hadn’t investigated the disputed transactions fairly. He said it was unfair for Lloyds not to reimburse his loss and said that Lloyds staff could have been involved.

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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’m sorry to disappoint Mr M, but I’ve decided not to uphold C’s complaint. Mr M has provided a lot of information in support of C’s complaint. I’ve read and considered everything he has provided, and I recognise he says Lloyds should refund the transactions he’s disputed and that Lloyds actions have been unfair. However, I’m not persuaded Lloyds has behaved unreasonably here. I recognise Mr M feels Lloyds should reimburse C in line with the Authorised Push Payment (APP) fraud reimbursement protection rules set out by the Payment Service Regulator in October 2024. However, I do want to explain to Mr M that these rules aren’t retrospective so even if I thought Lloyds should refund him under this rule, it would only apply to transactions which took place after this date. Furthermore, the rules only apply whereby someone has been tricked into sending payments to a fraudster via bank transfers – “push payments” are where payments are pushed through by the account holder. Debit card payments and ATM withdrawals aren’t covered as ‘debit cards are “pull” payments, whereby the merchant takes the funds, and ATM withdrawals simply dispense cash. And in any event, these rules aren’t applicable to C’s complaint as Mr M says C didn’t make the payments. I have received information from Lloyds in confidence, regarding its decision not to refund C’s disputed transactions which Mr M claims were the result of fraud as he didn’t make the payments. I recognise that Mr M may wish to know more about this evidence and Lloyds’ decision, however, DISP rule 3.5.9(R) allows me to accept sensitive evidence in confidence – for example if it contains security procedures. I think it is appropriate here that this evidence remain confidential, therefore I won’t be commenting further on the specific evidence it has provided, nor will I be commenting on each specific transaction. The regulations relevant to this case are the Payment Services Regulations 2017 (the PSRs). These explain that, generally speaking, account holders will be liable for payments they’ve authorised, and banks will be liable for unauthorised payments. I’ve taken this into account when considering what’s fair and reasonable in the circumstances of this complaint. Lloyds isn’t persuaded the payments weren’t made by C and I think its decision is reasonable. I say that because of the difference in how and when the transactions were undertaken. The 116 payments are a mixture of online banking, mobile banking, ATM transactions, and direct debits. In terms of the direct debits, I can see these were set up as a regular direct debit payment for around £480 per month to repay a credit card. I’m not persuaded that a fraudster would set up a direct debit for this type of payment, as this isn’t usual behaviour and wouldn’t generally provide the benefit to a fraudster. Mr M has disputed the ATM withdrawals and said he feels a fraudster was able to access the cards because Lloyds sent them to the incorrect address for C. However, Mr M also appears to have confirmed receipt of the cards and said no-one else had access to his PIN. Additionally, over the period in question, the transactions disputed by Mr M were made using four different cards. On the balance of probability, I think it’s unlikely that a potential fraudster would have been able to access four different cards during this period and obtain a PIN number for each of the cards to make the disputed withdrawals. Furthermore, I’ve seen copies of C’s bank statements and what appears to be genuine transactions – as Mr M hasn’t disputed them – being made around the same time Mr M says he didn’t have the card to make the

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withdrawals. I’ve also seen evidence from Lloyds where Mr M disputes he’s made certain card payments, which the electronic audit shows have been made via chip and PIN. There are other payments made on the same day around the same time which Mr M hasn’t disputed. It’s difficult to conclude these disputed payments were made by a fraudster using a card at the same time Mr M was using his genuine card. Therefore, I think it was reasonable for Lloyds to say it thought Mr M was responsible for those payments and decline to reimburse C. This pattern is also repeated for the online payments Mr M has disputed. Mr M has said he didn’t have access to his phone to make the payments, but the relevant security information has been entered to undertake the payments. Mr M also says he hasn’t shared the log in or security information for his phone to be accessed or someone else to make them online via a different handset. However, genuine payments have been made around the same time, and I think it’s unlikely a fraudster guessed the online security information or was able to log into Mr M’s phone around the same time the genuine payments were made without him noticing. Given the discrepancies in Mr M’s version of events and the information available to it, Lloyds has declined to refund C. Based on all the evidence provided by both parties, I think this was reasonable. Overall, the evidence suggests that the transactions were more likely than not carried out by Mr M – and I see that it’s reasonable for Lloyds to decline to treat them as authorised and decline to reimburse him. Based on what I’ve seen, I don’t think these payments appeared usual or out of character for C’s account so I don’t think there would have been any cause for concern to Lloyds, such that it ought reasonably to have contacted C to see if the payments were genuine. So, I’m not persuaded that there is a reasonable reason to ask Lloyds to reimburse C for the disputed transactions. Mr M told our service that Lloyds has acted unreasonably in giving notice of its intention to close C’s account as a result of the issues he experienced in the branch. As I wasn’t present at the time, I can’t be sure what happened. However, regardless of how matters escalated within the branch, I’m persuaded that there was some form of disagreement between Mr M and Lloyds staff. The terms of C’s account with Lloyds say the bank can close an account without notice if a customer has behaved improperly, such as in a threatening or abusive manner. Lloyds has its own policies on what it considers acceptable behaviour, and that’s a commercial decision it’s able to make. The bank’s records show it was satisfied Mr M had behaved inappropriately and therefore it could have closed C’s account immediately. However, I can see that it gave C a month’s notice of the account closure in writing, so I’m satisfied C was given a reasonable opportunity to open an account elsewhere and I don’t Lloyds acted unreasonably here. I recognise that this will be disappointing for Mr M, and I acknowledge he says the impact of these transactions has been incredibly difficult for him and C. However, based on the information available to me I don’t think Lloyds has treated C unfairly or behaved unreasonably. Therefore, I won’t be asking it to do anything more. My final decision My final decision is that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask C to accept or reject my decision before 27 April 2026. Jenny Lomax Ombudsman

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