A MAJOR high street bank has made a huge change to its ‘de-banking’ rules earlier than necessary.
NatWest has extended the amount of notice it gives customers before shutting their bank accounts.
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The high street bank has changed its internal rules to give customers 90 days’ notice before closing their bank accounts.
Current Financial Conduct Authority rules stipulate that banks only need to give 60 days’ notice.
However, NatWest’s change comes ahead of new legislation which will require all banks to follow the 90 day rule from the summer.
Speaking to The Daily Telegraph, NatWest chief executive Paul Thwaite said: “I’m pleased to say we’ve already implemented the extension of notice periods from 60 to 90 days ahead of the draft legislation being implemented.
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“I was very keen as a bank that we implemented that as quickly as possible.”
It comes just under a year after NatWest boss Alison Rose was forced to step down after lying about the reason for closing ex-Ukip leader Nigel Farage‘s account with Coutts, the group’s private banking arm.
Nigel Farage took his experience public, and the issue of “de-banking” has become a hot topic of debate ever since.
But you don’t have to voice strong views to get dumped by your bank.
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In fact, thousands of customers have their bank accounts shut down with little warning or explanation every year.
Sun Money has previously spoken to a number of readers who have suffered dire consequences when their accounts were cancelled without warning.
NatWest boss Dame Alison Rose quits after leaking Coutts story about Nigel Farage
Chancellor Jeremy Hunt introduced tougher new rules to “stamp out de-banking” last October.
The new legislation, which is expected to come into force in the summer, won’t just extend the notice period for bank account termination.
It will also require banks to give customers clear and tailored explanations for why they had closed an account – unless in limited cases, such as where this would be unlawful.
Why might my account be closed?
Your bank could decide to dump you simply because you don’t meet its terms and conditions.
For example, when you signed up you might have agreed to pay in a certain amount each month or to set up several direct debits.
In this type of situation, the bank would need to give you at least 30 days’ notice so you can move your money elsewhere.
Which? Money editor Jenny Ross says: “Under some circumstances, banks are allowed to close accounts without notice and without providing a reason.
“This includes suspected fraudulent use of the account.”
Your bank could put an immediate freeze on your account if it sees spending or large transfers in or out that seem suspicious.
It might block money from leaving your account to help protect you if it’s worried that you’ve fallen victim to fraudsters.
Similarly, if a large amount of money is received, it might suspect you’ve been caught up in a money-laundering operation.
Fraudsters can manipulate customers into becoming so-called money mules.
This means that they might be helping crooks to move around cash earned from crime without even knowing it.
Sometimes victims believe they are helping out a friend or that they are being paid for a job that seems legitimate.
After putting a temporary freeze on your account, the bank will then investigate more thoroughly.
If it’s still unsatisfied after this, it can permanently close your account.
Banks don’t have to explain why they’re closing your account
UNDER current rules, banks don’t always have to explain their reasons.
Guidelines for banks say: “You don’t have to explain to a customer why you’ve closed their account, but it can be helpful to do so.”
The Government wants to bring in new rules forcing banks to give account holders three months’ notice before shutting their accounts and provide an explanation.
But even then this wouldn’t apply where the bank suspects fraud.
Even now, it’s still worth asking your one to explain its decision as it has a duty to treat you fairly.
You can write to them saying you wish to make a “subject access request” to find out more information about why you’ve been ditched.
What should you do if your account is closed?
It’s important to try to find out if there are any problems that might have triggered the closure.
For example, it might be that crooks have stolen your identity and applied for loans in your name.
Start by running a free credit check through a service like moneysavingexpert.com’s Credit Club, Credit Karma or Clearscore.
It’s best to try all three if you’re concerned in order to cover the three main credit agencies that keep records of your financial dealings.
The reports should help you spot if there are any accounts that you don’t recognise.
If you’re worried that your account might have been flagged as suspicious, you can also apply to two fraud-fighting organisations — Cifas and National Hunter – to find out what information they hold on you.
When you write, say that you would like to make a “subject access request”.
IF you’re not happy with the way your bank has treated you, make a complaint.
After eight weeks, if the bank doesn’t respond or if you’re not satisfied, you can take your complaint to the Financial Ombudsman Service (FOS) for free.
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If the FOS agrees that you’ve been treated unfairly and you can prove that you have lost out financially as a result, you might be able to get compensation.
