British regulator urged to act against “degrading” bank account closures

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Britain’s financial regulator has been urged to take action on the unexpected shutdown of numerous bank accounts by some of the UK’s biggest lenders, leaving tens of thousands of account holders in dire straits.

Customers who saw their accounts frozen without warning have called on the Financial Conduct Authority (FCA) to intervene so that banks are forced to return money faster and those affected are not financially deprived.

Based on testimonials from account holders who contacted I, people have had to rely on food banks, gifts from family and friends, and high-interest loans to fend for themselves when their accounts were unexpectedly frozen. In some cases, readers have said that closing their accounts and the extreme hardships they faced trying to get their money back left them suicidal.

Lender NatWest and digital bank Monzo are accused of being among the worst offenders, but a large number of complaints have also been filed against Revolut, Monese and Pockit.

More than 5,500 people joined a Facebook group, “NatWest closed our account,” to express their anger and seek advice on how to get their money back, while more than 10,000 joined the “Monzo stole the Facebook group. our money ”.

Administrators of the two Facebook pages say they have seen an alarming increase in the number of people signing up for groups, with more than 1,000 people signing up to join the Monzo Facebook page in the past 30 days. NatWest’s Facebook page only had five members 18 months ago.

Martyn James, of the independent online complaint resolution service Resolver, said I: “This is a huge problem and I think it is due to the automation of money laundering controls – all of our evidence suggests it goes horribly wrong.

“People who clearly don’t do anything shady see their accounts frozen for no reason, while cuts in customer service mean you can’t contact certain banks easily – and when you do, you’re told they can’t. not help because they are not allowed to discuss the reasons why the account is frozen. The fault lies solely with the banks for their systems and their staff. “

Mr James added that the financial regulator must take action. Bella Ahosi, who runs the “Monzo Stole Our Money” Facebook page, said “absolutely” the FCA should do more to help people.

The FCA declined to say if it intends to do more to tackle the problem of account closures and how long it takes for people to get their money back but, in a statement sent to I, he said: “We understand the frustration that closing an account can cause.

“A bank’s decision to provide services is up to it based on its assessment of the customer. Our rules require that companies treat their customers fairly and consider the impact of any account closure, especially when a customer may show signs of vulnerability. Any business that freezes an account must ensure that customers are not denied access to their money unnecessarily. “

According to data from the Financial Ombudsman, 2,800 complaints were filed against NatWest concerning current accounts in the 12 months leading up to the beginning of April, in addition to the 2,600 complaints filed the previous year. Almost 1,400 complaints were filed against Monzo in 2020.

The financial ombudsman was unable to determine how many of those complaints specifically concerned account closures, but a spokesperson for the public body said: “We continue to see complaints from consumers whose accounts have been closed. closed or suspended. “

Kerrie Fowler, a caregiver from Wales, is one example. On June 11, she received a text from NatWest which read: “IMPORTANT Following a review of your banking arrangements, we have made the decision that we can no longer offer you banking facilities. “

She told me it took her a month to regain access to her money. “I felt like I was a criminal. They made me feel ashamed and all I wanted was to prove to them that I hadn’t done anything wrong, I just wanted my money back. The whole process made me sick with fear, it made me vomit, I couldn’t eat or sleep. It was all embarrassing and degrading.

Duncan Stevens, managing director of Gretel, a hub that reconnects consumers with lost and dormant accounts, said: “It is difficult to argue that this is acceptable treatment of customers and the distress caused is evident. .

“While closing an account is sometimes a necessary action for a bank, it should only be a last resort and there should be clear and timely communication with the customer at all times. “

NatWest declined to comment on the number of closings in the past 12 months, but a bank spokesperson said, “We will never close a customer’s account for no good reason.”

Monzo said: “Any decision to close an account goes through a rigorous manual review process and is in line with our responsibilities and requirements as a regulated bank.”

Were you affected by the issues in this story? Email [email protected] or contact the author on Twitter @newlands_chris



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