What to Do if You’ve Been ‘De-Banked’


When Coutts Bank told Nigel Farage it was closing his accounts it said it was for commercial reasons, but it then told the BBC Business Editor Simon Jack that it was because he had insufficient funds in his account. A subsequent Subject Access Request (SAR) made by Farage revealed neither of those was the real reason. In fact, the bank had compiled a dossier on his political beliefs and concluded that his views “were at odds with our position as an inclusive organisation”. In other words, he was de-banked because Coutts disapproved of his perfectly lawful political beliefs.

Having found out the real reason Coutts closed his accounts, Farage can now lodge a complaint with the Financial Ombudsman Service. It is also open to him to  sue Coutts for belief discrimination. This episode illustrates why it is essential to submit an SAR if you are de-banked. Certain beliefs are protected by the Equality Act 2010, making it unlawful for companies to discriminate against you simply because you express those beliefs, and the Government has indicated it’s going to revise the Payment Services Regulations 2017 to make it clear that banks and payment processors cannot discriminate against political figures such as Farage and, indeed, campaigning organisations such as the Free Speech Union. This is something we’ve been lobbying for ever since we were de-banked by PayPal in September 2022.

If you’re an FSU member who’s been de-banked you should contact our case team and they can help you follow the steps set out in these FAQs.

Your Right to a Basic Bank Account

The Basic Bank Account Agreement (BBA) came into force in 2016 to ensure that no one was left entirely without access to basic financial services. Under the terms of the Agreement – which is between the nine largest high street banks and the government – the following institutions must provide a basic personal bank account to anyone who does not have access to such an account elsewhere and must do so free of charge:

    • Barclays UK
    • The Co-operative Bank
    • HSBC UK
    • Lloyds Banking Group (including Halifax and Bank of Scotland)
    • Nationwide Building Society
    • NatWest Group (including Royal Bank of Scotland and Ulster Bank)
    • Santander UK
    • TSB
    • Virgin Money
 
Signatories to the BBA can only decline to open a basic bank account or close down an existing basic bank account if:
 
    • The customer has access to another UK based payment account.
    • The bank reasonably believes the customer will use the account unlawfully.
    • The customer has “acted in a threatening, abusive or violent manner towards staff”.
    • Opening or maintaining the account would cause the Bank to break the law.
    • The customer refuses to provide proof of identity or declines a credit check. (Poor credit cannot be used as a reason to decline a customer’s request for a basic bank account, although a credit check may be carried out for identity verification purposes.)
    • The customer repeatedly breaches the Bank’s terms and conditions.
    • There have been no transactions on the account for more than 24 consecutive months.
 
Basic bank accounts only have standard features and are not the same as regular current accounts. A basic bank account must provide customers with a debit card that can be used in shops and online, allow customers to deposit and withdraw cash both in branches and at ATMs and facilitate direct debit and standing order payments. Basic bank accounts do not come with a cheque book or overdraft facilities. But on the plus side, the banks charge no fees on basic accounts.
 
If de-banking has left you entirely without access to financial services, you should flag this in your letter of complaint in response to the decision to de-bank you, provided your bank is one of the nine (or one of the nine’s subsidiaries) listed above. We also recommend pointing your bank to the Basic Banking Agreement.
 
Be warned, though. A 2017 report by the Select Committee on Financial Exclusion entitled ‘Tackling financial exclusion: A country that works for everyone?’ identified a number of issues with the provision of basic bank accounts. Critically, providing basic bank accounts is extremely expensive to the signatories of the BBA. There is no money to be made in providing accounts because they’re free. As a result, BBA signatories commonly fail to advertise the availability of basic bank accounts and bank staff often neglect to inform customers that they may be entitled to a basic bank account, particular customers they’re trying to de-bank. There have also been reports that some BBA signatories fail to train staff on the availability of basic bank accounts. A 2021 follow up report identified these as ongoing issues.
 
For the purposes of reminding your bank that you’re entitled to a basic bank account, the following links may be useful:
 
Government information on basic bank accounts and the BBA.
 
Money Helper guide to basic bank accounts.
 
Shelter guide to basic bank account applications.

 

Make a Complaint to the Bank

A disturbing feature of ‘de-banking’ is the tendency to give customers either no reason at all why their accounts have been closed, or a vague, catch-all reason. For instance, when PayPal closed the FSU’s account it told us it was because we were in breach of its wide-ranging ‘Acceptable Use Policy’, without telling us specifically how we had breached it. This made it difficult to appeal PayPal’s decision. If you’ve been de-banked, you might therefore reasonably conclude that it’s pointless to make a complaint to the bank. However, while you’re unlikely to get a satisfactory response, you should make a complaint nevertheless. As you’ll see later, your ability to escalate your concerns to higher authorities – such as the Financial Ombudsman Service – is dependent on first exhausting the internal complaints processes of the bank or payment processor in question. Even a refusal to address your complaint will be helpful.

Most payment services providers publicise their complaints policy on a dedicated web page which you can find by doing a search on their website, or on Google. You may also find details of their complaints process in emails and letters you have received from them. In your complaint you should:

    • Provide a factual timeline of events including when you were notified that your account would be closed and when services were actually withdrawn.
    • Remind the provider that, according to the Financial Ombudsman Service, they have a responsibility to respond to complaints within eight weeks. If the withdrawal of services has left you financially vulnerable you should make the institution aware of this, although this doesn’t oblige them to speed up the process.
    • Reference the duties of the provider as set out in Principle Six of the Financial Conduct Authority’s Handbook. Principle Six states: “A firm must pay due regard to the interests of its customers and treat them fairly.” Your complaint should point out that the withdrawal of financial services without adequate explanation is a violation of Principle Six – in other words, it’s not fair to close your account without giving you a detailed explanation.
    • You should normally be given two months’ notice of the decision to close a bank account (though some accounts may require only two weeks’ notice). Check your terms of service, and if you think the notice requirements have not been followed, tell your bank this.
    • If you have a disability, such as a diagnosis of dyslexia, you should notify the provider of this and provide medical evidence where possible. Although there is no formal obligation on financial providers to take this information into account when processing complaints, many institutions now have internal policies that oblige them to act more swiftly when dealing with customers who are designated as ‘vulnerable’.

As your complaint progresses you should keep a note of all correspondence you have with the bank, making a record of all phone calls, letters and emails. Communicating with the bank won’t always be easy but, if you can, communicate in writing.

Make a Subject Access Request (SAR)

You should submit an SAR to the firm that has ‘de-banked’ you at the same time you make a complaint (there is no need to wait for the firm to respond to the complaint before submitting an SAR). When an organisation receives an SAR it must provide copies of all the personal information it holds about you within a month (though this can be extended to three months for large or complex requests). If you have been named in internal conversations via email, or in the minutes of meetings, this should be revealed by an SAR.

You can find a full guide to making an SAR here. You can also use the FSU’s template SAR letter (see below). Key points that you should bear in mind are:

    • If you submit your SAR at the same time as your complaint, send the two communications separately and ideally to the bank’s data protection team. This will ensure that the institution cannot pretend they mistook your SAR for part of the complaint. You should clearly label your SAR as such.
    • Include your name, full contact information and any account or reference numbers used by the bank to identify you. Note the bank may respond by asking for proof of identity.
    • Consider specifying a time frame when requesting the data the organisation holds on you. For example: “Please provide the personal data you hold about me from January 31st 2022 to May 30th 2023.” If you request all the data the institution holds about you after being a customer for an extended period of time, it might take more than a month for the organisation to answer your request.

Make an SAR to World-Check

World-Check Risk Intelligence, which is owned by a company called Refinitiv, is a third party intelligence agency employed by high street banks across the world to check that their customers are not ‘high risk’, whether because you’re suspected of involvement in criminal activity or a PEP (Politically Exposed Person). If World-Check has flagged you as a risk then your bank may withdraw services from you without notice and without notifying you why. If the bank suspects you may be involved in financial crime they are legally obliged not to give a reason for closing your account. This is known as ‘tipping off’ law and is intended to prevent money launderers from concealing evidence of financial crime.

The Times recently revealed that World-Check reviews information about “adverse media” and “postings on website, blogs or social media” when deciding whether to classify someone as a risk and, if so, whether low, medium or high. Although World-Check claims that this information is only used to establish whether someone is a money laundering risk, it is possible that extraneous or inaccurate information about a person’s political views may also be captured. For example, in 2016 former Islamic extremist turned counter-terrorism expert Maajid Nawaz revealed that World Check had flagged him as a terrorist and this had made it difficult for him to access financial services. After Nawaz took legal action World-Check was forced to remove the terrorist designation and pay him compensation.

If you have been de-banked you should submit an SAR to World-Check to find out whether you have been erroneously classified as a high risk customer. You can find information about making an SAR to World-Check here. If it turns out that World-Check holds inaccurate information about you then you are entitled to request that it corrects it. If your de-banking proves to be the result of a mistake by World-Check then you should contact your bank to notify it of the error and request that it reinstate your account.

Appeal the Bank’s Decision

If the experiences of FSU members are anything to go by, the financial institution that has ‘de-banked’ you is unlikely to find in your favour when you make a complaint. Frustratingly, in most of the cases we have seen, the bank or payment processor generally answers a customer’s complaint by doubling down on the refusal to provide an explanation, or by signposting you to a dense policy document without specifying which of the many clauses in the policy you are meant to have breached. If the firm finds in your favour and reinstates your account, that’s great. But if not, you should appeal the outcome of your complaint. The organisation should provide information about your right to appeal its decision when it tells you the outcome of your complaint. You need to appeal before you can escalate your complaint to the Financial Ombudsman Service.

The Ombudsman advises customers to give financial institutions eight weeks to respond to a complaint. This means that you may have the results of the SAR in hand by the time you need to appeal the decision. If the contents of the SAR show that the bank has closed your account because of your lawfully held views, then you should:

    • State this clearly in your appeal, including copies of the SAR documents that provides evidence of this and highlighting discrepancies between the bank’s account of their actions in formal communications to you and what the SAR has revealed.

    • Reiterate the principle of fair treatment for customers as outlined above.

    • Point out that under the Equality Act 2010 it is illegal for financial institutions to discriminate against customers because of their ‘protected’ religious and philosophical beliefs (and say that just because the courts haven’t yet designated certain beliefs as ‘protected’ doesn’t mean they won’t do so if you sue a payment services provider for belief discrimination).

Make a Complaint to the Ombudsman

If the financial institution fails to respond to your complaint within eight weeks or you are unhappy with the outcome of your complaint (or your appeal), then you can escalate your concerns to the Financial Ombudsman Service. The Ombudsman provides independent dispute resolution for consumers who are struggling to resolve issues with banks and payment processors. Remember, the Ombudsman will not investigate your complaint until you have exhausted the internal complaints and appeals process. You can find a guide to making a complaint to the Ombudsman here.

Note also that any claim for belief discrimination under the Equality Act has a six-month limitation period, and may need to be brought before the Ombudsman is able to respond. Contact the FSU if you think you may have a belief discrimination claim

If you do escalate your complaint to the Ombudsman, make sure you do the following:

    • Assemble your paperwork carefully. At a minimum, the FOS will need to see the outcome letters from your original complaint and the appeal. Include a clear timeline of events.

    • If you have the results of the SAR and they support your case, make sure you include copies of the relevant documents and outline why they support your case.

Be Prepared to Appeal… Again!

If the Ombudsman does not find in your favour you have the right to appeal its decision and the process for doing this should be explained in the decision letter. Appealing the Ombudsman’s decision is the last step you can take before pursuing legal action.

Contact the FSU and Seek Legal Advice

If both the bank and FOS find against you but you believe you have been ‘de-banked’ for exercising your right to lawful free speech, then you will need to seek legal advice. FSU members can contact our case team at any time for help and support with a speech-related ‘de-banking’ issue.

Template SAR Letter

ADDRESS OF BANK OR PAYMENT PROCESSOR

YOUR ADDRESS

[DATE]

Dear Sir or Madam,

Subject access request

Name: [INSERT YOUR NAME]

Account No: [INSERT YOUR ACCOUNT NUMBER]

Please supply the personal data you hold about me, which I am entitled to receive under data protection law, covering the following dates:

    • [INSERT BEGINNING AND END DATE OF THE TIME FRAME YOU ARE REQUESTING DATA FOR]

If you need any more information to deal with this request, please let me know as soon as possible.

I would prefer to receive the data in pdf or Microsoft Word format by email to [INSERT YOUR EMAIL ADDRESS].

It may be helpful for you to know that data protection law requires you to respond to a request for personal data within one calendar month.

If you do not normally deal with these requests, please pass this letter on to your data protection officer or relevant staff member.

If you need advice on dealing with this request, the Information Commissioner’s Office can assist you. Its website is ico.org.uk, or it can be contacted on 0303 123 1113.

Yours faithfully,

[YOUR NAME]