Why Has My Bank Account Been Closed?

22 Aug 2023, 57 mins ago

This blog will look at the reasoning banks may have when deciding to freeze or close your bank account, new rules proposed by the Government and rights and protective measures available to customers.


We recently saw the conclusion of a headline-grabbing, high-stakes banking saga that revolved around UK politician Nigel Farage, private banking company Coutts, and National Westminster Bank (NatWest).  However, the phenomenon of ‘de-banking’ has not been limited to Farage; businesswoman and anti-Brexit activist, Gina Miller, faced a similar situation, with her political party bank account being shut down by online bank Monzo.  Notably, in both cases the banks initially refused to share details as to why they chose to end the relationships, eventually providing very minimal information which confirmed that both closures were politically driven.

Who can be ‘de-banked’?

Unfortunately, whilst these recent cases of ‘de-banking’ have attracted headlines and attention, the experience is not limited to high-profile politicians in the UK.

Specifically, de-banking often affects individuals who hold prominent positions in public life (including politically exposed persons).  People with such prominent positions can be perceived to carry greater financial risk by financial institutions, as it is often assumed that such high-profile people are more likely to be subject to bribery, money laundering and external pressure.

In an effort to mitigate risk, safeguard their reputation and comply with regulatory frameworks, financial institutions can choose to pre-emptively terminate customer-bank relations to ensure their own protection.

Banks will also often carry out extra checks, involving more extensive due diligence and automated profiling procedures to learn as much as they can about any high-profile prospective client.  These steps are typically taken both prior to and during the course of the customer-bank relationship.


Government to Investigate Banks

Nikhil Rathi, CEO of the Financial Conduct Authority (FCA), has confirmed that the FCA is liaising with NatWest about the Farage scandal, adding that the existing rules make it clear that banks should not discriminate on the basis of political views.  Coutts insist that the closure decision involved the consideration of various factors beyond political views, including “commercial viability, reputational considerations, and legal and regulatory requirements.”

Government Changes

The Government has proposed new rules, under which it will soon be required for banks to give customers 90 days’ notice before closing their account(s) or downgrading their services.

Banks will also be given a new duty to “spell out why they are terminating a bank account – boosting transparency for customers and aiding their efforts to overturn decisions.”

However, it is important to note that these new rules may clash with cases in which a customer is facing criminal allegations.


Bank account closures are not limited to political figures in the UK, and affect hundreds, if not thousands, of customers every year.  These cases have exposed the difficult balance many financial institutions and their high-profile customers must navigate to gain and maintain access to basic banking services.  As can also be seen from the two cases referred to above, financial institutions are not usually forthcoming with explanations as to the reasons behind their closure decisions, making it even more difficult for the affected individual(s) to ascertain next steps.

What rights do I have to a bank account in the UK? How can I protect myself?

Anyone in the UK with legal residence status has a legal right to hold a basic bank account.  Since 2015, nine banking institutions in the UK have offered basic bank accounts under the terms of the Payment Accounts Regulations 2015 (PARs).  These accounts must be fee-free for standard banking operations.

Previously, the nine institutions (including Lloyds Banking Group and Santander) were under voluntary designation; however, since the implementation of the PARs, they are now legally required to offer basic accounts to eligible customers.  In addition, member states within the EU are required to offer basic accounts by a sufficient number of firms, so as to guarantee access to all eligible consumers within their respective borders.

There are some techniques, methods and strategies that can be applied to reduce the risk of being de-banked, including, but not limited to:

  1. Keeping detailed information on source of funds to hand, including official documentation, where possible, to provide to any financial institution if requested;
  2. Asking for legal advice in the event that you have exhausted any and all internal processes specific to your bank; and
  3. Pursuing a Data Subject Access Request to learn what information a financial institution holds on you.

How Gherson can assist

Gherson’s regulatory, white-collar and investigations team are highly experienced in providing assistance on what you can do if your bank freezes or closes your account.  This includes assisting you in submitting a request under data protection legislation, otherwise known as a Data Subject Access Request, to ascertain what information banks and other financial institutions may be holding on you and their decision making, and then analysing the response and assisting with any appropriate challenge.

If you have any questions arising from this blog, please do not hesitate to contact us for advice; send us an email at enquiries@gherson.co.uk or, alternatively, follow us on TwitterFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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