Coutts closed Nigel Farage's bank account

Coutts, the private bank, closed the account of Nigel Farage in June 2023 after raising concerns about his political views, according to the House of Commons Library¹. Which? reports the same closure and date². The closure prompted the Financial Conduct Authority (FCA) to review account closures and led the government to propose draft regulations to further protect consumers¹.

The FCA has said closures often happen because banks cannot carry out "know your customer" checks required by money laundering regulations, or because they are concerned an account may be used for financial crime¹. Large banks must offer a basic bank account to individuals, but this does not apply to organisations, which can be left with no bank account access at all¹. A Treasury Committee inquiry found that eight UK banks closed over 140,000 small business accounts in the first 11 months of 2023¹. Which? reports the same figure and says the Committee highlighted it in February².

Complaints about de-banking to the Financial Ombudsman Service (FOS) rose from 2,683 in 2022-23 to 3,858 in 2023-24, a 44% increase, according to Which?, citing data in a letter from FOS chief executive Abby Thomas to the Treasury Committee². Of the 3,858 cases, 2,720 related to current accounts, 300 to electronic money accounts such as Revolut and 133 to savings accounts². Business customer complaints rose 81%, from 367 to 666². Complaints about restricted account closures, involving financial crime, money laundering or a politically exposed person, almost trebled from 243 in 2020-21 to 705².

Source: Which?, citing FOS data²

In March 2024 the government published proposals requiring banks to give 90 days' notice before terminating an account and to fully explain the reason, according to the Commons Library¹. Which? says banks should generally give two months' notice, which could rise to 90 days under the proposals, and that there is no minimum notice requirement in cases of suspected fraud². The Commons Library states the measures would not compel banks to change how they make decisions about account closures¹.

Why it matters for households

Account closures affect individuals as well as public figures. Individuals and small businesses who feel they have been de-banked unfairly can complain to the Financial Ombudsman Service if unsatisfied with how their bank handles the complaint¹. Which? says a complaint should go to the bank first, and that the FOS can be approached if the response is unsatisfactory or does not arrive within eight weeks². A Cifas marker alleging fraudulent activity does not appear on a credit report or directly affect a credit score, but is visible to firms checking the Cifas database when assessing applications; it can be checked through a data subject access request to Cifas using two forms of ID². The FOS data shows the uphold rate for complaints rose to 36% in 2023-24 from 26% in 2022-23².

What happens next

The government intends the 90-day notice and explanation rules to be in force by the end of 2024¹. The FCA consulted on rules to make cash access reviews a legal requirement and could widen the number of areas eligible for new services, with the same intended date¹. A mandatory reimbursement scheme for authorised push payment fraud comes into force from October 2024, and the Payment Systems Regulator has said it will gather data to monitor its effectiveness and assess risks, including firms restricting access to accounts and vulnerable customers being de-banked².