Barclays Bank UK PLC · DRN-6132253

The complaint Ms M complains Barclays Bank UK PLC (“Barclays”) blocked her accounts and then closed them without notice nor explanation. Ms M adds that as a result, she has now lost her tax- free wrapper on her ISA account, potentially costing her around £64,000. Ms M is also unhappy with the delays in receiving her funds held in her other accounts. Ms M says Barclays’ actions have caused her significant financial loss, distress, and inconvenience. What happened The details of this complaint are well known by both parties, so I won’t repeat them again here in detail. Instead, I’ll focus on setting out some of the key facts and on giving my reasons for my decision. Our Investigator has already explained that this complaint, and thereby my decision, will not deal with the block applied on her accounts, for a few days, in February 2025. Barclays closed Ms M’s accounts, including a cash ISA account, with immediate effect in April 2025. Barclays notified Ms M she could retrieve her funds by going into one of its branches. The first cheque Ms M was given didn’t clear with her external bank which led to her querying this with Barclays, and it issuing her with a new cheque. Unhappy Ms M complained. Barclays said it acted correctly when closing Ms M’s accounts, but that Barclays should have given Ms M a notice period. Barclays explained the reason the first cheque didn’t clear was because Ms M’s name with her other bank didn’t match with her name on the cheque. Barclays paid Ms M £150 for the inconvenience she suffered. Ms M referred her complaint to this service. One of our Investigator’s looked into Ms M’s complaint and they recommended it was upheld in part. In summary, the key points they made were: • Barclays didn’t act fairly in closing Ms M’s account and should, at worst, have given her two months’ notice. Barclays doesn’t have to give Ms M an explanation • Had Barclays given Ms M two months’ notice, she would have been able to move her ISA using the formal transfer process. But this error didn’t leave Ms M worse off because she mitigated the loss by investing £20,000 from the £20,700 ISA balance into a stocks and shares ISA elsewhere where she has so far had a 34% return on – far more than she would have had with the Cash ISA with Barclays • Barclays has already apologised to Ms M in its final response letter • Barclays has shown it sent the closure letter to its central print function on 28 April 2025. So, Barclays isn’t responsible for any delays in Ms M receiving it • Ms M was told Barclays needed to complete a sanctions check on 13 May 2025 when she went into branch. But this was an error as the records show Barclays

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completed one four days earlier. And, as the immediate closure of Ms M’s accounts was unfair, it was also unfair for Ms M to have needed to go into the branch to get her funds. The branch trip was a 17-mile round trip for Ms M • Barclays accept the first cheque not clearing was its error, and this led to two unnecessary trips for Ms M to its branch • To put things right, our Investigator recommended Barclays: o Pay a further £100 for the distress and inconvenience caused to Ms M by closing her ISA immediately o Pay £150 for the distress and inconvenience caused by the cheque issue o 8% simple annual interest on Ms M’s current account from 25 April 2025 till 21 May 2025 to compensate for the loss of access due to the cheque issue o The applicable savings rate at the time to be paid on each of Ms M’s savings balances between 25 April 2025 till 21 May 2025 to compensate her for the loss of interest due to the cheque issue Barclays accepted what our Investigator said. Ms M agreed with the majority of our Investigator’s findings, but emphasised Barclays’ error had left her worse of with the Cash ISA and wanted the matter reconsidered. Ms M made the following key arguments in her response: • The loss of a previous year ISA allowance cannot be restored later. Because Barclays closed Ms M’s Cash ISA immediately, she was prevented from initiating a formal ISA transfer. The result is the permanent loss of Ms M’s 2024-2025 ISA allowance. Ms M’s use of the 2025-2026 allowance for a Stocks & Shares ISA does not reinstate the 2024-2025 wrapper she lost • A permanent £700 shortfall in 2025-2026. Even after Ms M maximised her 2025- 2026 ISA at £20,000, £700 of the original £20,700 remained unsheltered during 2025-2026, solely because Barclays removed the 2024/25 ISA wrapper. That £700 has been and will continue to be exposed to taxation until capacity becomes available in a future tax year • Taxable exposure during the period out of any ISA wrapper. Between closure and the point Ms M funded her replacement ISA, her savings were outside the ISA wrapper, meaning interest/returns were taxable when they otherwise would not have been. This is a direct and foreseeable consequence of immediate closure without notice • Compounding (long-life) loss of the ISA wrapper. An ISA is not just a one-off interest rate – it is an enduring tax shelter that protects compounded returns year after year. Removing funds from this wrapper permanently reduces Ms M’s tax-free headroom Our Investigator didn’t think what Ms M said made a difference. In relation to Ms M’s point about the £700, they said that even with that remaining in an account which Ms M incurred savings interest tax on, the overall position is still that Ms M hasn’t made a financial loss on the funds due to Barclays' error. As there was no agreement, this complaint has been passed to me to decide.

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What I’ve decided – and why I’m very aware that I’ve summarised the events in this complaint in far less detail than the parties and I’ve done so using my own words. No discourtesy is intended by me in taking this approach. Instead, I’ve focussed on what I think are the key issues here. Our rules allow me to do this. This simply reflects the informal nature of our service as a free alternative to the courts. If there’s something I’ve not mentioned, it isn’t because I’ve ignored it. I’m satisfied I don’t need to comment on every individual argument to be able to reach what I think is the right outcome. I do stress however that I’ve considered everything Ms M and Barclays have said before reaching my decision. 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 have decided to uphold this complaint in part. I’ll explain why. Accounts - reviews block and closures Banks in the UK, like Barclays, are strictly regulated and must take certain actions in order to meet their legal and regulatory obligations. They are also required to carry out ongoing monitoring of an existing business relationship. That sometimes means Barclays needs to restrict, or in some cases go as far as closing, customers’ accounts. Barclays has explained and provided evidence as to why it reviewed and blocked Ms M’s accounts. I’m satisfied Barclays did so in line with its obligations. Barclays is entitled to close an account just as a customer may close an account with it. But before Barclays closes an account, it must do so in a way, which complies with the terms and conditions of the accounts. The terms and conditions of the accounts, which Barclays and Ms M had to comply with, say that it could close the accounts by giving her at least two months’ notice. And in certain circumstances it can close an account immediately or with less notice. Barclays closed Ms M’s accounts with immediate effect but later said it got this wrong and should have given Ms M two months’ notice. Having carefully reviewed Barclays’ explanation and supporting evidence, I’m persuaded Barclays should not have closed Ms M’s accounts immediately – but it did have basis to have done so with two months’ full notice without any account restrictions. Barclays failed to carry out its review properly in line with its due diligence obligations. Had it done so, I’m persuaded Barclays would not have acted in the way it did. Cash ISA account This brings me to the crux of Ms M’s complaint as it currently stands. Ms M argues that Barclays should compensate her for the potential loss of her tax-free wrapper. It’s clear that had Barclays given Ms M at least the two months’ notice, she would have been able to transfer the ISA without losing the tax-free wrapper. But when awarding compensation, I must think carefully about the loss Ms M made, and what mitigatory steps, if any, she took. Ms M took mitigatory steps with £20,000 out of £20,700 by investing the funds into a stocks and shares ISA and has told us that she has already benefitted from a 34% return – significantly more than the Cash ISA. What’s key here is that this mitigates against any loss to the tax-free status she might otherwise had benefitted from given the substantive increase

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in return which comfortably covers this. I would add too that those funds are now held in a different capacity, and importantly, Ms M isn’t worse off because of Barclays’ decision to close her account. Moreover, it’s impossible to say how Ms M’s future plans would evolve, let alone upwards of 30 years. I’ve also considered what Ms M has said about the £700 she didn’t invest in the other ISA. But it was Ms M’s choice not to reinvest this in the same or similar scheme. So, in conclusion, whilst Barclays unfortunately made an error in closing Ms M’s Cash ISA immediately, this mistake has ultimately left Ms C receiving a much better return on the amount than she stood to earn. So, I don’t think it’s fair to expect Barclays to compensate Ms M for the losses she has set out. Cheque issue Had Barclays given Ms M the appropriate notice, she wouldn’t have needed to go into branch. I also agree that there were times Barclays needlessly asked her to do so – this includes being told a sanctions check was outstanding when it wasn’t and for the error Barclays accept it made in not allowing the first cheque to clear. So, Barclays should compensate Ms M for the deprivation of funds from when it should have released the funds on 25 April 2025 until it did on 21 May 2025. Other points • Barclays has shown it sent Ms M the notice of closure letter in April 2025, and so it isn’t responsible for any delays that may have happened due to the post • I’m satisfied Barclays apologised to Ms M for its failings in its final response letter • Barclays’ final response letter met its complaint handling obligations even though it may not have addressed Ms M’s specific complaint points in the detail she would have liked Putting things right To put things right, Barclays must: • Pay Ms M a further £250 compensation, in addition to the £150 it has already paid, for the distress and inconvenience caused in closing her account with immediate effect and for the numerous branch trips she didn’t need to make • Pay 8% simple annual interest on Ms M’s current account balance from 25 April 2025 till 21 May 2025* • Pay Ms M the prevailing interest savings rate at the time, on each of her savings’ account balances from 25 April 2025 till 21 May 2025* *If Barclays considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Ms M how much it’s taken off. It should also give Ms M a tax deduction certificate if she asks for one, so she can reclaim the tax from HM Revenue & Customs if appropriate. My final decision For the reasons above, I have decided to uphold this complaint in part. Barclays Bank UK PLC must now put things right as directed above. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms M to accept or

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reject my decision before 20 April 2026. Ketan Nagla Ombudsman

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