Lloyds Bank is holding on to our urgently needed £5,500
A Guardian reader, treasurer of their parish church, has spent months trying to recover nearly £5,500 from Lloyds Bank after it closed the church's account and failed to transfer the balance to a new account with another bank. The delay left the small congregation unable to access its own funds, forcing it to borrow money from parishioners to cover essential repairs and an electricity bill, and highlights how administrative failures at major banks can seriously disrupt small organisations reliant on limited funds.
The trouble began last November when Lloyds said the church account would be closed and a new business account would need to be opened online, but a system fault prevented both the treasurer and branch staff from doing so. A new account was opened with a different bank in early March, yet Lloyds repeatedly failed to transfer the balance, at one point blaming lost identity verification documents. Only after the treasurer raised the prospect of public exposure did Lloyds act quickly, apologising for poor communication and offering £400 in goodwill plus £96 in lost interest, though it initially omitted to address the still-missing funds. The money was eventually transferred more than four months after the account closure, with Lloyds later admitting it "should have handled things better".
- Lloyds delayed transferring a parish church's £5,500 for over four months
- System faults and lost documents caused repeated hold-ups
- Bank paid £496 compensation only after threat of publicity
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Lloyds Bank is one of the UK's largest high street banks, providing accounts to millions of personal customers and organisations, including small community groups. Many charities, clubs and parish churches rely on such accounts to hold modest funds for everyday running costs, from utility bills to repairs, so any disruption to access can quickly cause real difficulty for volunteers managing tight budgets.
This case involves a parish church whose treasurer, a volunteer responsible for its finances, tried to move the church's money to a new bank after Lloyds said it would close the existing account. When banks close accounts, they are expected to transfer any remaining balance promptly to wherever the customer specifies, a process that normally takes days rather than months.
The episode has drawn attention because it shows how internal errors at a major bank, such as system faults or paperwork going astray, can leave a customer without funds for an extended period. For a small organisation without reserves to fall back on, this is more than an inconvenience, as it can affect the ability to pay for essential services and maintenance.