THOUSANDS of customers have their bank accounts shut down with little warning or explanation every year.
NatWest boss Alison Rose stepped down this week after lying about the reason for closing ex-Ukip leader Nigel Farage’s account with Coutts, the group’s private banking arm.
5
5
Anti-Brexit campaigner Gina Miller found herself in a similar position when Monzo shut the account for her True and Fair party without explanation.
The bank later stated that it did not allow political party accounts.
But you don’t have to voice strong views to get dumped by your bank.
Sun Money has spoken to a number of other readers who have suffered dire consequences when their accounts were cancelled without warning.
Here Leah Milner, James Flanders and Lana Clements explain what to do if you’re de-banked.
Plus Sun Money spoke to three customers who were given the boot . . .
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.
Most read in Money
In this type of situation, the bank would need to give you at least 30 days’ notice so you can move your money elsewhere.
But, 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 not satisfied after this, it can permanently close your account.
DO THEY HAVE TO SAY WHY?
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 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 ELSE CAN I DO?
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.
Again, when you write, say that you would like to make a “subject access request”.
HOW DO I COMPLAIN?
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 for free.
In the past financial year, there were 1,389 complaints to the FOS about bank account closures and one in four was upheld in favour of the customer.
COULD I GET COMPENSATION?
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.
Consumer rights expert Martyn James says: “Currently, it can be difficult to prove that you have been treated unfairly because banks don’t have to give you very much information.
“Sadly many customers are being left in the dark about why their accounts are shut down — it’s become too easy for banks to hint at money laundering and not offer a proper explanation.
“In many cases, there may be an innocent explanation for so-called ‘suspicious activity’.
“Don’t be afraid to challenge the decision and ask for money back if it’s caused you any financial loss.”
WHAT THE BANKS SAY
A spokesperson for UK Finance, which represents all major banks, says: “Freedom of expression is vitally important, and customers should not have an account closed unfairly.
“Firms do close a small proportion of accounts, for example if a customer is abusive or if there is suspicious activity.
“When dealing with financial crime firms are often restricted in the information that they can disclose.”
‘They told me they didn’t need to justify it’
NATWEST customer Steve Williams had been with his bank for nearly ten years when he was dumped in December.
The sole trader, from Norbury in South London, who owns a black cab dismantling business, held both his company and personal accounts with the bank.
5
But he was told these would be closed by the end of January.
Steve, 69, said: “On the phone, they explained that they didn’t need to justify the closure and directed me to the account terms and conditions.”
He was blocked from moving his money to his new bank online and had to visit the branch twice, waiting more than two hours on one visit to get his £12,000 returned to him.
He said: “It’s ridiculous that they have signs up on their branch windows saying ‘We’re here to help’ when nothing could be further from the truth.”
‘I had to beg my suppliers for more time’
FLOWER farmer Andie McDowell still doesn’t know why HSBC closed her accounts last October after 26 years as a customer.
The small business owner couldn’t pay her bills after it took almost a month to reclaim the £58,000 she had in her accounts.
5
Andie, 42, says the ordeal nearly put her flower firm Dahlia Beach in Abingdon, Oxon, out of business. She said: “I had to beg suppliers to give me more time to pay.”
The bank gave her three months’ notice of closure, but didn’t transfer her cash. They sent a cheque, which her new bank rejected. After nearly a month, HSBC transferred the cash.
A HSBC spokesperson said: “A decision to close an account is never taken lightly. We did not put blocks on the closing cheque.”
‘I was panicked, the bills were piling up’
ADMIN worker Amy Cudd couldn’t pay bills or buy her partner’s birthday present when NatWest closed her account in April.
Amy’s aunt, who she lives with in Sudbury, Suffolk, transferred £6,000 to her as a gift.
5
Within 24 hours her account was suspended due to “unusual activity” then closed a week later.
Amy, 24, said she begged for a reason but staff wouldn’t tell her. She said: “I panicked. I had bills and didn’t know what to do.”
NatWest reopened Amy’s account later in April and apologised, offering £100 in compensation after it was contacted by The Sun.
Responding to Steven and Amy’s cases, a spokesperson said: “NatWest is subject to legal and regulatory requirements, which may mean it is required to suspend an account.”
