Bank of Scotland plc trading as Halifax · DRN-6236168

The complaint Mrs B complains Bank of Scotland plc trading as Halifax treated her unfairly in relation to a block it placed on her account. She says she’s lost out because of the bank’s actions, and it should compensate her. What happened I issued a provisional decision on this complaint, setting out what I intended to find and why, subject to any additional information received. Below is a copy of my provisional decision. Copy of provisional decision Mrs B held power of attorney for a third party “A”. In January 2022 Mrs B was added to A’s Halifax account. A was removed from the account following their death in May 2023. Shortly after this, in July 2023, Halifax suspended access to the account after being told of a dispute by an executor of A’s will “C”, who, along with Mrs B, held responsibility for administering A’s estate and accounting for its value. C and Mrs B were in dispute over the correct value of A’s estate. Mrs B’s position was that the money in the account belonged to her under rules of survivorship, whereas C considered that A’s estate value needed to include both the remaining balance and account for money that had been drawn prior to A’s death. Both Mrs B and C engaged legal representation to deal with the dispute. Towards the end of 2024 Mrs B complained to Halifax that there wasn’t a legal justification for the bank to continue to maintain the block, given that it had investigated and confirmed there hadn’t been any wrongdoing in the account being made joint. Mrs B said the situation was untenable, particularly given that no court proceedings had been issued by C during this period. Mrs B said the ongoing suspension was causing her to lose out financially as she’d been unable to invest the money in higher-interest accounts and use the funds for other purposes. She also expressed concerns that Halifax had sent a misleading letter to C’s solicitors about why the account had been made joint. She asked Halifax to lift the suspension and to compensate her for loss of interest, the legal fees she’d incurred, and for her trouble and upset. Halifax acknowledged its letter to C’s solicitors contained incorrect information. To say sorry, it credited Mrs B’s account with £1,000. But the bank didn’t think it had treated Mrs B unfairly by maintaining the suspension. It said it had given her three options for this to be lifted, asking he to provide: 1. a court order that set out how the funds in the account should be distributed. 2. evidence that legal action between the disputing parties had ceased, resulting in an agreement between the executors. 3. evidence that legal action had ceased without a clear outcome, in which case it would review the situation with its legal team. Halifax suggested Mrs B could get a letter from her solicitor for this purpose, though it said it couldn’t guarantee this would

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result in the suspension being lifted. Mrs B’s solicitors wrote to Halifax in January 2025 without reply. So Mrs B asked us to look into her complaint. Our investigator reviewed matters and proposed a resolution under which Halifax would lift the suspension and pay Mrs B interest at 8% on the account balance, from the date the block was applied. The investigator wasn’t persuaded Mrs B had done enough to demonstrate Halifax was responsible for her legal fees, but recommended Halifax pay Mrs B £250 for her trouble and upset in addition to the £1,000 it had already paid. Halifax agreed to the investigator’s proposal (less a deduction for interest that had already been earned on the funds). But Mrs B didn’t. She felt a large proportion of her legal costs were attributable to Halifax’s suspension of the account, and sought a minimum of £5,000 towards this. Mrs B set out other losses in terms of lost investment opportunities and having to cash in her pension to pay down her mortgage, submitting she would have used the funds in the account to do that instead, had it not been for the suspension. She wanted additional compensation for her trouble and upset. And she asked if the interest could be structured as a “compensation” payment, so she didn’t have to pay tax on it at 40 per cent. Halifax said it was still prepared to settle the complaint on the basis the investigator had recommended but no more. So the matter has been passed to me for review and determination. What I’ve provisionally 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’m aware that Mrs B has made detailed submissions in support of her position. While I’ve read and carefully considered these, my decision here focuses on what I consider to be the material issues in terms of resolving her complaint, in line with my statutory role that requires me to resolve disputes quickly and with minimum formality. While I’m conscious our investigator felt the survivorship point was persuasive, I must be clear that it’s not my role to determine whether Mrs B or C is correct in terms of whether the account (and any funds it held, before and/or after A’s death) forms part of A’s estate for valuation purposes. Although the account had been made joint, and subsequently reverted to Mrs B’s name only upon A’s death, the legal position in terms of dealing with the value of A’s estate might be rather more complex, as relevant case law1 suggests. There are other considerations, for example, where one of the account holders contributes all the funds, there can be a presumption of a resulting trust. In other words, the money still belongs to the deceased and therefore their estate. As this aspect remains undetermined by a court and I’ve seen nothing else that persuades me the dispute has been otherwise resolved, it’s by no means evident that the owner of the funds has unfairly been deprived of their use such that they should receive interest or other compensation. Further, given the nature of the dispute between Mrs B and C, I can understand why Halifax suspended the account when it was informed, and indeed, why it remained in place pending resolution of the underlying dispute. Both seem to me to have been sensible steps for the bank to take in such circumstances. While Mrs B has questioned C’s standing to raise such a dispute (and for Halifax to have 1 See, for example, Re Northall (deceased) [2010] EWHC 1448 (Ch).

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acted on it), the legal right to control and deal with a deceased person’s assets passes under the will. Grant of probate is simply proof of that right. And there’s no suggestion in this case that C isn’t a named executor in A’s will. All of the above notwithstanding, Halifax has already lifted the suspension on the account, and Mrs B has said that the funds are now under her control in readily identifiable higher interest accounts. The bank has said it remains willing to pay Mrs B interest and £250 in accordance with the resolution our investigator proposed. Although I’m conscious of the arguments Mrs B has put forward as to why she should receive more than Halifax has offered to pay her, in light of what I’ve said I don’t consider that they offer any persuasive basis for me to require this. I will simply leave it to Mrs B to decide whether, on reflection, she now feels able to accept the bank’s settlement proposal. My provisional decision My provisional decision is that I do not require Bank of Scotland plc trading as Halifax to increase its existing offer of settlement, which it has confirmed it is willing to pay to Mrs B to resolve her complaint. For the avoidance of any doubt, that offer is: 1. to pay Mrs B 8% simple annual interest2 on the account balance from the date of suspension until the date the suspension was lifted (less deduction of the interest earned in the account on the funds); and 2. to pay Mrs B £250 compensation for any inconvenience to which she has been put, in addition to £1,000 it has already paid her. I make no other award or direction. Responses Halifax didn’t have anything further to add. Mrs B responded with further information. I will summarise the main points below: - She didn’t think the bank had acted fairly. She said her concern was not with Halifax’s initial need for caution, but with the unreasonableness of its actions following the conclusion of their own investigation in March 2024. Halifax had kept her funds frozen, deprived her of court protection, and made it impossible to regain access. Access was only achieved by her complaint being reviewed by our service. - Under the right of survivorship, the legal title to the funds had passed to her. So, any challenge regarding a 'beneficial interest' or a 'resulting trust' became a private civil matter. Should C have chosen to take this dispute to court, it would be a civil claim as the funds had already been placed in her sole account. But the way Halifax chose to deal with this, after the initial investigation, was unfair and unreasonable. - Instead of requiring C to prove their case via a formal court freezing order, which would have given her the legal safeguard of an 'undertaking as to damages’, the bank unilaterally deprived her of her funds for two years. By acting as an arbiter of a civil dispute rather than a neutral financial institution, Halifax had failed to protect her interests and effectively granted C a risk-free freeze of her private property. Her solicitors requested on several occasions that C filed their Civil claim as the pre court 2 Mrs B has asked about structuring the interest payment so that she doesn’t have to pay tax at the higher rate. To be clear, this is not something that I can (or would) direct a business to do, not least because of the potential for breaching His Majesty’s Revenue and Customs (“HMRC”) rules on tax treatment of income.

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protocol had ended, but they still haven’t issued a claim. - Halifax made the decision to release her funds in March 2024 unless "substantial evidence" was produced. C failed to provide such evidence, offering only "pre-court protocols”. Halifax continued with the block. However, if Halifax informed C that to maintain the freeze that a court order would be required, this freeze would have ended without the need for our service’s intervention. If this had gone to court, she would have won. - In March 2024, Halifax concluded its investigation and found no evidence of wrongdoing. However, it then presented her with three options which were unfair, because it placed the keys to her funds in the hands of a third party who had no incentive to act. As the defendant, she had no legal power to force the claimant to "agree" or to "withdraw." By insisting on these options, the bank created a procedural deadlock. And when her solicitors wrote to Halifax to explain that we were at an impasse, the bank did not respond. - 8% interest didn’t remedy the loss of her pension. - She believed the bank’s actions had fueled the dispute. £1,000 and apology for the letter suggesting the account had been made joint for the convenience of internet banking was insufficient for the ongoing damage. C has continued to rely on this. - Halifax had breached rules and regulations, including Consumer Duty. - Halifax was guilty of bias and procedural unfairness towards her. She enclosed a recent letter from C’s solicitors confirming they’d obtained her private call transcripts via a Subject Access Request (DSAR). This had been released without her consent or a court order. Whilst she acknowledged the ombudsman may not rule on the data breach itself, this action was a critical piece of evidence, showing the bank was assisting C. She had a separate complaint about this. - She accepted the proposed interest payment by the bank. But to avoid further financial complication, she requested that the ombudsman directed this payment be made before 5th April 2026, so that it fell within the current tax year. Thus, assisting in the remedy. - She provided a timeline of events, claims for specific losses and how they had arisen. Additional documents for review. Mrs B doesn’t think the compensation is enough. She wants a direction requiring Halifax to issue a formal statement to her solicitors and that of C’s, stipulating the following: - It retracted the suggestion that the account was made joint for "internet banking convenience." - She already held full internet banking permissions four months prior to the account becoming joint. - Its internal investigation had satisfied the bank to the legitimacy of the account being made joint. - Halifax reconfirms that the funds passed to Mrs B under the right of survivorship and were redesignated into her sole name in June 2023. In line with our process, the case has been passed back to me. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable

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in the circumstances of this complaint. Having read all that Mrs B has said and provided, while I appreciate the detailed explanation of her position, I find that it offers no persuasive reason for me to reach a different set of findings or conclusions from those I set out in my provisional decision. In particular, Mrs B’s position appears to be based on a premise that it is beyond question that the account funds belong to her and have no bearing on A’s estate. As I noted in my provisional decision, that has not yet been determined by a court or otherwise resolved, and it is not my role to do so. Given this, there is no basis for me to make the direction Mrs B is seeking. After careful consideration, I see no basis to amend my finding that it was not unreasonable for Halifax to take the steps it did, when it did. Nor do I find that Mrs B has provided me with grounds on which I might be minded to require the bank to increase its offer of compensation. Consequently, I adopt my findings and proposed resolution in full in this final decision. I leave it to Mrs B to decide whether, on reflection, she now feels able to accept the settlement the bank has proposed. If Mrs B doesn’t wish to accept, she and Halifax will not be bound by the outcome or the settlement offer. In such circumstances any rights she might have to pursue her claimed losses elsewhere, such as at court, are unaffected by my decision. I’m aware Mrs B has previously retained the services of a solicitor, and she might wish to discuss any such claim and its prospects of success with them before deciding her next steps. But either way, my decision now marks the end of our involvement in this complaint. My final decision My final decision is that I do not require Bank of Scotland plc trading as Halifax to increase its existing offer of settlement, which it has confirmed it is willing to pay to Mrs B to resolve her complaint. For the avoidance of any doubt, that offer is: 1. to pay Mrs B 8% simple annual interest on the account balance from the date of suspension until the date the suspension was lifted (less deduction of the interest earned in the account on the funds); and 2. to pay Mrs B £250 compensation for any inconvenience to which she has been put, in addition to £1,000 it has already paid her. I make no other award or direction. Under the rules of the Financial Ombudsman Service, I’m required to ask Mrs B to accept or reject my decision before 22 April 2026. Sarita Taylor Ombudsman

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