The man argument against the bank in this case is the incorrect information they provided to the customer about his balance. However since the money was not drawn form the ATM run by Lloyds TSB they dont have any information about the transaction. It is not correct to assume that if you draw money from outside UK from an unknown place and third party ATM your bank will be informed immediately about the transaction. You may not like it but I dont see any fault of the bank in this case.