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.
Share this..
Related stories
Rising Bank Penalties causes concern over Consumer Awareness
Customers of banks within the UK have seen a sharp rise in the amount they are paying out in penalties for accidental mistakes. The total figure over the past 12 months has risen to £650m paid in penalties, according to research conducted by finance management service, OnTrees. Almost two million consumers have incurred fees ‘accidentally’, by making late payments or using an unauthorised...
Read MoreIrish authorities looking to wind down Anglo-Irish bank
Irish finance Minister Brian Lenihan is this week expected to put forward a plan to the European Union for a ten-year wind down of troubled financial operation Anglo-Irish bank. This is the bank which was effectively bailed out by Irish taxpayers and has so far cost the Irish population around €25 billion. However, the government believes that now is the time to effectively disband the bank...
Read MoreIs it time to review the high-profile status of UK banks?
Over the last few weeks the UK banking sector has come under extreme pressure, gone cap in hand to the government for assistance and then blatantly turned round and ignored some of the conditions which had apparently been agreed. There is now a call for the UK banking sector to be thoroughly investigated and reorganised so that never again can the UK economy be in the hands of so few individuals a...
Read MoreUnclaimed funds to go to community use
Funds lying dormant in bank accounts and building societies could be used for community purposes under new plans being considered by the government.It is estimated that up to £400 million is currently lying in accounts which have been untouched for more than 15 years, with the chancellor, Gordon Brown, looking at plans to enable the government to reclaim the money.A consultation on the issue is s...
Read MoreMore than a third of Brits bank online
A decade after the advent of internet banking, a report from Nationwide shows that 37 per cent of British people now manage their money online. Half of those who bank online said it was easy and 53 per cent said they found it convenient. One user in nine accesses internet banking as they can not always get to their local branch and one in 25 preferred the paperless process. Over half of online ban...
Read More