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Banks close down one million accounts in four years – reports

Emma Lunn
Written By:
Emma Lunn

The revelation by the Mail on Sunday comes as the number of customers being “debanked” remains in the spotlight after Nigel Farage’s public row with Coutts.

Last weekend, the Mail on Sunday claimed that banks were closing 1,000 accounts a day. This weekend, it followed up the story with news that more than a million bank accounts have been shut since 2019.

The newspaper obtained figures via a Freedom of Information request and says they show that the rate of closures is accelerating, with banks on track to surpass the previous record of 343,500 accounts closed last year.

The ability for banks to close customers’ accounts quickly and without reason can be an important tool in the crackdown on fraud, especially when it comes to anti-money laundering rules.

But many people have claimed they have been ‘debanked’ due to the political views they hold. Last month saw private bank Coutts close Nigel Farage’s account without giving the Brexit campaigner a reason.

Farage maintained the account closure was due to his political views and said he’d been rejected by other banks. But Natwest CEO Alison Rose was found to be the secret source behind a BBC story that alleged Farage was ditched by Coutts for not being wealthy enough. Rose stepped down from her role as a result of the uproar surrounding the account closure.

New rules to challenge closures

The government plans to introduce new rules to give customers up to 90 days (from 60 days now) to challenge closures. The new legislation will give customers more time to challenge a decision through the Financial Ombudsman Service, or find a replacement bank.

Banks will also be required to explain why they are terminating a bank account which should improve transparency and help customers to potentially overturn the decision.

The rate of bank account closures has accelerated from under 50,000 account closures in 2016, when the Financial Conduct Authority (FCA) introduced new reporting rules, to 343,500 accounts being shut last year.