Complaints about bank account closures have surged this year, new figures reveal, as the sector comes under scrutiny following the ‘debanking’ scandal involving Natwest and Nigel Farage.
The Financial Ombudsman (FOS) opened 1,613 new complaint cases about account closures between April and September, it said in a letter to the Treasury Committee on Monday.
This rate of more than 268 complaints per month compares with a monthly rate of around 225 for the whole of last year, when a total of 2,708 complaint cases were recorded.
The Treasury had written to the ombudsman in September asking it to provide the complaints data.
The figures, which were first reported by The Daily Telegraph, come as the Financial Conduct Authority (FCA) investigates whether the banking sector is systemically “debanking” customers for their political views.
The probe was triggered by Brexiteer and former UKIP leader Nigel Farage after his account was closed by Natwest-run Coutts, partly due to his political views.
Natwest’s then boss Dame Alison Rose was forced to step down in July after admitting that she discussed confidential details about Farage’s account with the BBC.
The FCA’s preliminary review found last month that the closure of Farage’s account was an outlier.
Abby Thomas, the FOS’ chief ombudsman, wrote in Monday’s letter that the surge in complaints “appears driven by more ‘general’ account closure cases”.
She said the data suggests that banks may have been “closing more accounts for reasons such as account inactivity, their own commercial reasons (e.g. exiting parts of the market) or due to incomplete information from customers”.
The complaints were made up of 1,351 “general” closure cases and 262 about “restricted” accounts, often involving concern about crime or “politically exposed persons”.