DRN-6272668

The complaint Mrs B is unhappy with the interest Lloyds Bank PLC have applied to her credit card account. What happened After having held a credit card with Lloyds for a number of years and following a period of non-use, Mrs B started to use her credit facility with Lloyds again after changing the credit card around March / April 2025. However, Mrs B noticed the balance on the card did not match her spending and in May 2025 she complained to Lloyds about the interest she was being charged. Lloyds said they had done nothing wrong and that interest had been calculated correctly for her account. After the matter was brought to our service Lloyds revisited what had happened on Mrs B’s account and said they could have provided Mrs B with a better explanation for her to understand the balance and interest on her account. Lloyds said Mrs B’s concerns about the balance and interest payable related to a sum of £303. This was a transaction made by Mrs B in December 2018 which she later disputed. In early 2019 Lloyds had let Mrs B know the chargeback for that amount had been unsuccessful. Although Lloyds had deemed the chargeback for Mrs B’s transaction of £303 to be unsuccessful, Lloyds explained they had continued to mark £303 as ‘in dispute’ rather than return it to the payable balance on the account. Because of this, it meant the £303 was not expected to be paid and it did not attract interest. It was noted on Mrs B’s statements as ‘in dispute’. Around the same time Mrs B had also disputed another transaction which was for £138, but the dispute for that transaction was successful and so the amount of £138 was removed from Mrs B’s outstanding balance and was no longer referenced as ‘in dispute’ on Mrs B’s statements. In April 2020 Mrs B made some payments to the card to bring down the balance and these payments took the outstanding balance to below £303. While the balance was below £303 (and because the sum was marked as ‘in dispute’) this meant no minimum payment was required and no interest was being charged to the account. In late October 2021 Lloyds said they removed the ‘in dispute’ marker for the £303 transaction and it therefore followed that the balance on Mrs B’s account became payable again, started to attract interest again and a minimum payment was expected to be made. The minimum payments were subsequently collected by Direct Debit and Mrs B’s statements no longer showed the amount of £303 as ‘in dispute’. Mrs B was not using the card at this time, as she did not use the card from 2019 until 2025, so the balance did not increase.

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Lloyds said they could have provided Mrs B with a better explanation about what had happened on her account to assure her the balance and interest applied was correct. To recognise the trouble and upset caused because of this Lloyds offered to pay Mrs B £75. At the time of making this offer Lloyds also chose to refund all interest charged to Mrs B’s account from April 2025 until August 2025, waived the interest for September 2025 and refunded a late payment fee that had been applied to Mrs B’s account on the August 2025 statement. Our Investigator concluded that interest had been fairly applied to Mrs B’s account and that the offer of £75 to recognise Lloyds could have given Mrs B a more helpful explanation about her account was fair in the circumstances. Mrs B disagreed and did not accept the £75 offered as it did not reflect the upset caused to her. Mrs B said her concerns were driven by the £303 which she said should not have been part of her balance. Mrs B referenced occasions Lloyds had told her that she did not need to repay the £303 and that the balance on her account was zero. Mrs B also mentioned problems with her credit file in December 2025; Lloyd’s customer service and lack of empathy towards her; that she hadn’t authorised Direct Debit payments in 2021; and Lloyds stopped sending her statements in the post without her agreement. Our Investigator explained our service was only able to consider the complaint that had been brought to our service and which Lloyds had reviewed, so our service was only able to consider Mrs B’s complaint about the interest applied to her account. The Investigator noted Mrs B had previously raised a complaint to Lloyds in 2019 in relation to the £303 chargeback. And they said Mrs B’s other concerns would need to be raised with Lloyds as separate matters if she wanted to pursue them. 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. I’ve only included a summary of what’s happened above, and while I may not respond to every point each party has raised, I have reviewed all the submissions available and focused on what I consider relevant to reaching a fair and reasonable resolution in this matter. While noting Mrs B’s concern that the £303 was not removed from the balance on her account, as already explained above, the authority I have in relation to what can be considered under this case is limited and so it is not for me to decide whether the dispute raised for the £303 was handled fairly or not, and therefore whether the £303 should or should not form part of the balance on Mrs B’s account. As our Investigator set out to both parties, this case is limited to Mrs B’s complaint she made in May 2025 about the interest applied to her account. I’m aware Mrs B believed in early 2025 that she was taking out a new credit card account, but it is apparent that in April 2025 Mrs B’s existing credit card account changed from a ‘Classic Credit Card’ to a ‘Cashback credit card’, so while the product style changed, the approved credit facility remained the same, so a new balance was not started when Mrs B started using a card again in May 2025. In terms of the interest applied, it is apparent that no interest was applied while the balance remained below £303 for the time Lloyds were wrongly recording the amount as ‘in dispute’, so I can’t see that Mrs B was made worse off here and this supports that while the amount of £303 was recorded by Lloyds as being in dispute it would not attract interest.

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I’ve reviewed Mrs B’s statements from December 2018 until August 2025 and having done so I’ve not seen anything to persuade me that Lloyds have acted unfairly in the interest they have applied to Mrs B’s account. Mrs B’s statements also show when the £303 was no longer being treated as ‘in dispute’, as well as when the minimum payments for her account became due again in late 2021 and showed that the outstanding balance was attracting interest once more. Mrs B accepts she received the statements by post until 2022, and they would have been available to her online after this. It is therefore difficult to say Mrs B was not able to see when interest was being applied to her account and what the balance was. While I don’t think Lloyds have applied interest unfairly to Mrs B’s account Lloyds have already accepted they could have done a better job of helping Mrs B to understand what had happened with her account to assure her the interest was being correctly applied. I think it was reasonable for Lloyds to recognise they could have provided their customer with better support at that time. Lloyds offered Mrs B £75 to recognise their shortcoming here and the trouble and upset this would have caused to Mrs B by not helping her understanding when she reached out to them in 2025. I’ve considered whether this offer is fair. Awards relating to distress and inconvenience caused are not straightforward - there is no prescribed formula for deciding how much should be paid. And it should be noted that awards of this nature are not intended as a fine or punishment – these are considerations for the appropriate regulator. I am sorry to learn that Mrs B’s health and well-being is not in a good place at the moment and I hope this improves for her. I realise this matter has caused Mrs B much upset at an already difficult time and I have been mindful of this in my considerations. I assure Mrs B my findings here are not intended to cause her further upset. I realise this will come as a disappointment to Mrs B as it is not the outcome she is looking for, but in the circumstances and given what my considerations here are limited to, I’ve not seen enough to persuade me that Lloyds’ offer of £75 for the shortcoming outlined above is unfair and is within the range of award our service would look to offer. Although Lloyds could have better supported Mrs B in her understanding of her account, this does not alter that the interest added to Mrs B’s account was done so fairly. Overall I think interest was added fairly to Mrs B’s account and the offer of £75 to recognise Lloyds could have better supported Mrs B’s understanding of her account when she approached them in 2025 is fair and reasonable in the circumstances. Putting things right Lloyds Bank PLC should pay Mrs B £75. My final decision For the reasons above my final decision is that Mrs B’s complaint is upheld in part and the offer Lloyds Bank PLC have proposed is fair in the circumstances. Lloyds Bank PLC should put things right as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs B to accept or

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reject my decision before 14 May 2026. Kristina Mathews Ombudsman

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