Terry opened a new current account with his bank – he already held several other current and savings accounts with the same bank and, not long after opening the new account, began using it for a high volume of gambling transactions.
Terry opened a new current account with a bank. Not long after, he began using it for a high volume of gambling transactions and ended up in an unauthorised overdraft. The bank noticed and spoke to Terry to find out more. Terry told the bank he gambled as entertainment and used previous winnings to fund further activity. He repaid the debt in full the following week.
Terry then had a further big spate of gambling. Some of the gambling payments triggered the bank’s fraud prevention systems, but each time Terry confirmed that he’d made the transactions. The bank spoke to Terry five times about this over a short period, but took no further action and did not ask him if he was experiencing any difficulty.
There then followed a 16-hour period of intensive gambling, which left his account significantly overdrawn.
At that point the bank told Terry it wasn’t happy with how he was using his account, defaulted it and closed it straight away. Terry was unhappy with the bank’s actions and referred his complaint to us.
What we said
The terms and conditions of Terry’s account said the bank could close the account immediately (for a number of specific reasons) or give 60 days’ notice. Whilst we were satisfied that the bank was entitled to end its relationship with Terry, we didn’t think it had given him appropriate notice as the reason wasn’t one specifically outlined. We also noted the bank hadn’t discussed the debt with him or signposted him to debt advice agencies when he got in in touch. We said this failure caused Terry unnecessary confusion and distress at a time when he was already struggling.
We also felt the business could have done more to support Terry much earlier. The frequency and volume of transactions – which put his account into an unauthorised overdraft – and how quickly he gambled his winnings again, suggested his gambling was more likely to have been a compulsion and/or addiction rather than a pastime.
Banks are expected to process payments a customer authorises it to make, in line with Payment Services Regulations. But they also must treat customers in financial difficulty, like Terry, positively and sympathetically and protect those who are vulnerable. We saw little to indicate the bank had properly taken those responsibilities into account.
That said, in the specific circumstances of this case we didn’t think additional intervention from the bank would have likely stopped Terry from gambling – his spending decisions were a result of his addiction. We thought it more likely than not, even if the bank had blocked the payments, he would have still spent the money by using other means. So, we did not think it fair to tell the bank to refund the money Terry had gambled. We decided that it was fair for the account to have been defaulted because there was little to suggest that Terry would have been able to repay the debt, even if the bank had given him a more appropriate amount of notice.
Overall, we thought the bank ought to have offered more support at a time when Terry really needed it and closing the account immediately had caused added stress. The bank agreed to pay £750 compensation to recognise the impact of its failings.
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