Complaints about bank account closures rise by 20% – your rights when your account is shut down
The Financial Ombudsman says it currently receives around 60 complaints a week, up from 50 a week last year
MORE and more Brits complain they're left without access to money as their banks shut their bank accounts without warning.
The number of complaints from customers locked out of their accounts with no explanation has risen by 20 per cent since 2018, according to the Financial Ombudsman Service.
It says it now receives around 60 complaints of this kind every week, compared to 50 a week in 2018.
But the number of victims could be even higher as concerns are dealt directly with the bank involved before they reach the Ombudsman, while some may choose not to complain.
Banks are allowed to close accounts without a reason or explanation if there are concerns the account is being used - whether knowingly or not - for financial crime or fraud, according to the regulator the Financial Conduct Authority (FCA).
The systems are designed to protect victims by freezing all payments going in or out of an account, yet banks sometimes won't tell customers why their accounts have been frozen or closed.
'NatWest shut my bank account with no warning'
MARK Lamb, 27, first noticed something was wrong when his debit card stopped working.
A reader of The Sun was one such victim of his bank's whim last year.
Mark Lamb, 27, from Newcastle upon Tyne had his account closed without warning and was told he had just 14 days to visit his local branch to withdraw his money - and to return his debit card and chequebook.
This happened the day before Mark's Universal Credit was due to be paid into the account, leaving him panicking about how he would access the funds.
As the sales advisor doesn't have another bank account, he had to scramble documentation together from his mum to take to the Job Centre so his benefits could be paid into her account.
Mark has also been rejected by two other banks since the incident, leaving him without a bank account.
He told The Sun: "Still to this day I have not received a single letter explaining why my account was even shut.
"If I hadn't have phoned in I wouldn't have even known about my account being closed at all.
"I was supposed to receieve my monthly Universal Credit payment the day after I went into the bank.
"So I've had to go to the Job Centre and get this set up to go into my mum's account for now.
"It's been absolute hell - a complete hassle."
When The Sun contacted NatWest, the bank said it wrote to Mark to say it could no longer offer him banking services, but Mark insists this letter never arrived.
Firms should allow the customer a reasonable amount of time to make alternative banking arrangements before axing their account.
The FCA is currently working with trade body UK Finance to develop principles to improve how banks communicate with customers when they cannot offer, or continue to provide, banking facilities.
These are expected to be published in the next few weeks.
Banks rejected more than a million prospective customers for financial crime-related reasons in 2017, turning away 375,000 existing clients, according to the regulator.
The rise in complaints comes as banks try to tackle the rising threat of various types of fraud.
Your rights when your account is closed
BANKS are allowed to close accounts without notice if they suspect fraud.
But if you think your account has been closed unfairly, you can complain to the provider involved.
If you don't get a response within eight weeks or you're not happy with the response you do get, you can take your complaint to the free .
The Ombudsman says most of the complaints it sees about bank account closures or freezes involve:
- the bank not giving enough notice - the Ombudsman suggests that between 30 and 60 days’ notice is a reasonable unless there are suspicions fraud is involved
- maladministration
- the bank giving conflicting information or advice
- the bank showing unlawful discrimination
- the bank failing to follow procedures properly
If your account is closed, you should also remember to rearrange any direct debit or standing orders as these will have to be paid manually until you can get a new account.
More on money
At the end of last year, a report by the FCA found that banks are putting customers at risk of cyber attacks due to old IT systems.
Meanwhile, banks have been slammed by the Financial Ombudsman Service for blaming customers who’ve been scammed.
Plus, we've been behind the scenes at Lloyds to see how easy it for scammers to steal your cash.
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