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No Explanation Bank Account Closures ‘Unjust’

Banks that close customers’ accounts without explanation have been said to be acting against the natural rules of justice, according to the chairman of the Financial Services Authority’s Consumer Panel, Adam Phillips.

However banks currently close customers’ accounts and refuse to provide an explanation upon doing so, in order to follow anti-money laundering laws.
The issue was first highlighted on BBC radio 4, after it was revealed a six month old baby girl’s account was closed, with the bank claiming it appeared fraudulent activity had been discovered; however this was shown to be an error. Usually in this case fraud protection agencies will then act by putting a ‘flag’ against a customers name, preventing them from opening an account with either the same bank or another provider.

Mr Phillips commented how it was firstly not possible to discover what you have been accused of, before you find yourself unable to plead your case and banned from opening another bank account.

In some cases it is banking error that has caused the closure of accounts due to what they then label ‘fraudulent activity’, and it is the customer inevitably pays the price. This has led to Mr Phillips calling for major changes to be made to the manner in which banks deal with this occurrence.

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