Barclays Bank UK PLC · DRN-3731380

The complaint A company, which I’ll refer to as “E”, complains that Barclays Bank UK PLC unfairly closed its accounts and declined its application for a loan under the Coronavirus Business Interruption Loan Scheme. E’s director, Mr S, brings the complaint on the company’s behalf. What happened E banked with Barclays, holding a business current account and two foreign currency accounts. In or around May 2020, Mr S approached Barclays with a view to obtaining a loan for E under the government-backed Coronavirus Business Interruption Loan (“CBIL”) Scheme. Over the months that followed, there were a number of exchanges between Barclays and Mr S about E’s CBIL application. The bank asked for various pieces of information, which Mr S provided. While the CBIL application was still ongoing, Barclays conducted a review of E’s accounts. This led it to end its relationship with the company. The bank wrote to Mr S on 18 March to advise it would be closing E’s accounts on 17 May, so the company would need to make alternative arrangements. Barclays’ decision to withdraw its services from E also meant that it was unwilling to provide it with the CBIL. The bank confirmed this to Mr S by email on 24 March. Barclays subsequently closed E’s accounts – but in error, the bank closed the currency accounts on 16 April rather than 17 May. Mr S doesn’t think it was fair for Barclays to close E’s accounts in the manner it did, which exacerbated the company’s hardship during the coronavirus pandemic and without explaining its reasons. He also says that the bank didn’t notify him that it was closing E’s currency accounts, and that the premature closure and conversion of the balances held within them to Sterling – along with the deduction of the bank’s commission – caused the company a financial loss. Mr S is also unhappy that Barclays declined its request for assistance under the CBIL Scheme, and says that by the time it communicated the decision it was too late for E to apply elsewhere. The CBIL Scheme closed to new applications on 31 March 2021. All these issues, Mr S says, significantly disrupted E’s operations and ultimately led to it closing down. When Mr S complained to Barclays, the bank maintained its decision to withdraw services from E and said that its criteria for such decisions were confidential and couldn’t be shared. It said that it had closed E’s accounts in line with the terms and conditions, which had

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included giving appropriate notice so that the company had time to make alternative arrangements. And the decision to close E’s accounts meant that the company was no longer eligible for a loan from the bank. Barclays did, however, accept that it had closed E’s currency accounts a month earlier than the date it had specified in its notice. It apologised for this error and offered E compensation of £225 for any inconvenience caused. It didn’t think E had lost out financially, as the conversion rates used in April were preferable to those that would’ve been applied had the bank closed the accounts in May as it should’ve done. Our investigator thought Barclays’ offer was a fair way to put things right, and didn’t think it needed to do anything more. She said:  Barclays had been entitled to withdraw its services from E – just as Mr S could’ve chosen to close E’s account. And it had done so in accordance with the applicable terms and conditions.  The bank wasn’t required to provide the level of detail as to its decision and rationale that Mr S was seeking.  As Barclays accepted, it had closed E’s currency accounts a month earlier than it should have. But she couldn’t see that this had caused E a financial loss. The closing conversion rates had benefitted E and there was no evidence to show that the company had suffered any other losses as a result of these accounts being closed sooner than scheduled. So she thought the bank’s offer of £225 was fair, in order to compensate E for any inconvenience it had been caused.  Barclays had been entitled to decline E’s CBIL application and it hadn’t done anything wrong in doing so, given the circumstances. And she couldn’t see that the bank had caused any unreasonable delays in the process, noting that it had made legitimate requests for information during the process in order to assess the request. Mr S didn’t accept our investigator’s view and asked that an ombudsman review the complaint, so 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. The closure of E’s accounts Barclays was entitled to end its relationship with E, just as E was entitled to end its relationship with Barclays. The applicable terms and conditions gave Barclays the power to close the accounts at any time by giving at least two months’ notice. Having reviewed the basis of the bank’s decision, there’s nothing that leads me to think this decision was reached incorrectly or unfairly. Barclays wrote to E on 18 March with the requisite two months’ notice, advising that the accounts would be closed on 17 May. I appreciate that Mr S is unhappy at the timing of the closure – in light of the pandemic – and that the bank didn’t disclose its rationale. But I can’t say it did anything wrong in either respect. The notice period Barclays offered was that required under the terms of its agreement with E, and I think two months represented a reasonable period of time in which to make alternative arrangements even taking into account the exceptional circumstances of the time. While I appreciate Mr S’s desire to know

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why Barclays decided to withdraw its services, the reasons behind such decisions are subject to some legitimate confidentiality and the bank wasn’t obliged to share any more detail about this than it did. As Barclays has accepted, it did make an error in closing E’s two currency accounts before the two-month notice period was up. It closed them both a month earlier than scheduled. So it’s right that the bank compensates E for any impact this error had. I’ve considered what Mr S has said about the losses this caused E. But I can’t see that the company did actually suffer a financial loss from the premature closure of its currency accounts. This is primarily because the rates at which Barclays converted the account balances to Sterling were preferable for E at the time of the actual closure in April, compared to those that would’ve applied had the bank closed the account when it should’ve done in May. The bank has explained and evidenced that it didn’t charge commission on that conversion, contrary to Mr S’s suggestion. And Mr S hasn’t provided anything to substantiate the costs he says E incurred in having to make alternative arrangements for payments because the accounts were closed early. While E was always going to have to arrange alternative facilities in the light of Barclays’ legitimate decision to close its existing accounts, the premature closure of the two currency accounts curtailed the period of time within which it could do so. I can see how that would’ve put the company to some additional and avoidable inconvenience. For that, Barclays has already offered compensation of £225 and I’ve not seen anything to suggest a higher figure is warranted. The CBIL application As I understand Mr S accepts, Barclays was entitled to decline E’s CBIL application. Ultimately, once Barclays had decided to end its relationship with E, the bank wasn’t willing to consider any lending application from it. There’s nothing unreasonable in that, however frustrating it would’ve been for Mr S to be in that position after several months pursuing the matter. Mr S’s main concern is how long it took Barclays to confirm its decision, having begun liaising with the bank about the CBIL application in or around May 2020 and only being told in mid-March 2021 that the bank wasn’t willing to lend. I do have some sympathy for that argument, given that the deadline for CBIL applications was 31 March – meaning he only had a fortnight to seek an alternative. While I don’t think it would’ve been impossible for E to ensure an application was submitted elsewhere in time, I can see that the timeframe would’ve made things challenging – alongside everything else Mr S and his company would’ve been dealing with around this time. Either way, for me to uphold this aspect of the complaint I’d need to find that Barclays was responsible for some unreasonable or excessive delay. And I don’t think it was. Although the process was ongoing for some ten months or so, Barclays was in regular contact with Mr S – and much of the time taken was in the bank gathering the information it needed from Mr S to assess the request. Its requests for information were reasonable, relating to E’s financial performance, the impact of the pandemic on its operations and its ability to afford the repayments of the prospective loan. During this time, Barclays made clear on a couple of occasions why it was unwilling to lend on the terms initially sought by Mr S. So it wasn’t that one application was pending for all this time – rather, the proposal was rejected and amended during the ongoing dialogue, and further information was needed so that the bank could assess the revised proposals.

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While there were occasions on which Barclays didn’t get back to Mr S as quickly as it could have – meaning that he had to chase things up – none of these delays were so unreasonable or excessive as to make me think that E’s position was materially impacted or that any compensation is warranted. Taking all of this into account, I don’t think there is any basis on which I could fairly require Barclays to pay E any more compensation than the £225 it originally offered to pay. My final decision Barclays Bank UK PLC has already made an offer to pay E compensation of £225 to settle the complaint and, for the reasons set out above, I think this offer is fair. So my decision is that Barclays Bank UK PLC must pay E £225. Under the rules of the Financial Ombudsman Service, I’m required to ask E to accept or reject my decision before 21 February 2023. Ben Jennings Ombudsman

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